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One community hospital - 2000 AD.

One Community Hospital--2000 AD

The hospital with which I am associated today has 518 beds and trains 150 house staff members, plus a full complement of medical students, in 12 specialties. When I joined it some 40 years ago, the hospital had about 300 beds and offered house staff training to some 50 interns and residents in four disciplines. We still offer mostly fee-for-service medical care, but not for long.

Medical Staff

The first major change at the hospital was from a voluntary attending staff to a teaching environment, with full-time, compensated faculty responsible for the teaching of residents, and then for students. As these changes took place, leadership and control of the medical staff passed largely to the paid department chairs and to the contracted teachers and specialty physicians. This trend will continue until the medical staff becomes a full-time multi-specialty group practice working within the parameters of the hospital's sphere of influence. Some medical services of high specialization, such as neurologic surgery or high risk obstetrics, either will be shared or will be found in special centers of excellence.

The hospital campus has undergone major changes in the past 40 years. Bed capacity grew to well over 700, then was cut back in response to reduced demand to its present 518. Several building projects consolidated patient care in new or refurbished space, the vacated space being consumed by the insatiable needs of administration. With the advent of full-time faculty as well as geographic full-time voluntary staff (active staff and non-compensated faculty who practice on campus or exclusively at the hospital), an on-campus kfbice building became necessary. A second building consolidating most teaching resources is currently being completed. Today, most facets of patient care, both ambulatory and inpatient, may be accommodated on campus.

In the past, the hospital medical staff was widely dispersed throughout the community as freestanding private practices. Forty years ago, only one or two specialty groups, of two or three physicians, each existed. Today, most specialty practices are multiphysician in nature. The hospital has subsidized several groups and is in the process of increasing these efforts. The hospital has established a network of primary care centers throughout the market area. These centers export some services, such as radiology, laboratory, and physical therapy, to support the practice of local primary care referring physicians. The primary care centers also offer off hours patient care services for the local practices in an attempt to keep patients within the service network of the hospital. The primary care center is a joint venture between the hospital and the primary care specialty physicians.

Specialty practitioners and groups have banded together with the hospital to form an independent practice association (IPA). This joint venture has served as the negotiating body in contracting with third-party payers in setting up preferred provider organization plans. The medical staff has endorsed stringent credentialing criteria for membership on the staff, new or renewal. A restructured Health Care Review Division is conducting concurrent patient review on all admitted patients, generating a database used in quality review. In the near term, marketing efforts will be based upon demonstrated value to the purchaser of health care. The quality and utilization data provided by physicians of documented efficiency and effectiveness will be presented to health care buyers for use in comparative shopping.


The function and form of hospital administration has changed in direct proportion to the other changes in the environment. Forty years ago, the hospital was managed by an administrator, two assistant administrators, and a small corps of strong departmental managers. The prime function of administration was to ensure the adequacy of hospital housekeeping functions and to be accountable for the financial health of the hospital. These functions had to be completed to the satisfaction of the board. All medical activities were the responsibility of the medical staff. This simple arrangement has changed. Today, at last count, the hospital had a president, an executive vice president, and 13 vice presidents, all with defined responsibilities. A document published by the hospital contains eight pages of listings of assistant directors, department heads, and hospital-based doctors. Having worked with many members of the hospital management staff, I know they all make significant contributions to the hospital of today, and most are also concerned with the emerging entity.

The Future

That describes the road to now, and something of now. But what about the next century. My community hospital will become a multifocal, mustispecialty group practice centered upon a tertiary care hospital with one or more satelite institutions attached. The hospital will provide care across the board for a demographic area. It will contract directly with purchasers of health care and will stand at risk as an insurer of quality care by the employed medical staff.

The medical staff will be integrated into the group practice on a contractual basis. The medical staff will be compensated on the basis of many factors, some of which may be productivity, technical skill requirements, quality of output, patient satisfaction, service needs of others of the staff, cognitive abilities, and other values. The medical staff will serve only one system. Some specialty services will be purchased from centers of excellence providing high-technology tertiary carE, either by moving the patient or by importing the high-technology team for a particular procedure. Some specialty groups will service the needs of several adjacent hospital systems.

The administration and governance of the hospital will change from the typical format of a voluntary not-for-profit institution to an industrial corporation model. The chief executive officer will be the chairman of the board, with the chief operating kfbicer serving as president. These positions will be well compensated and will have performance incentives, as do other corporate executives. The board will assume the structure of a corporate board, be smaller, and bring needed expertise to the hospital. In all likelihood, not-for-profit status will give way to the for-profit mode. Profits will be distributed as incentives and performance bonuses. The bonus structure will include nursing services, a segment of the hospital professional staff largely forgotten when it comes to financial rewards.

The largest task to be accomplished as this new structure evolves will be the establishment of appropriate practice standards. What should be done by whom to which patient? The institution that solves the appropriateness of care conundrum will be a long-term survivor. The provision of health care must carry value to all concerned, but first and foremost to the patient. The most significant changes facing my hospital, as they are for the health care system in general, will be the result of this shift to a value measurement system in the provision of care.

William M. Davis, MD, is a medical management consultant in Akron, Ohio. He was Medical Director of Akron City Hospital when this article was written.
COPYRIGHT 1990 American College of Physician Executives
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Author:Davis, William M.
Publication:Physician Executive
Date:Mar 1, 1990
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