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Success will require a conscience.

Success Will Require a Conscience Professor Herzlinger's article can be a "shot in the arm" for physicians with interests and skills in medical management. Her examples illustrating reasons she sees contributing to failure do point to areas needing great attention and remedial measures. She has done us a service by calling attention to these needs. Physicians with such a bent can help find solutions to the present crisis in health care. While this message may not be new to many of us, it can serve to prod us as well as others.

Has the "Revolution in Health Care" failed? There has been a failure to meet expectations raised in the heyday of publicity about changes, but I would hesitate to call this failure of a revolution. I don't think we have yet had a revolution. We are still waiting for that "critical mass" to produce one. The closest we have come in the United States has been the managed care movement initiated by organizations more than 50 years ago--the prepaid group practices.

What made them "revolutionary?" There are two key concepts worthy of mention that most of them, and many of those that came later, adopted. First, they did all they could to remove the incentive inherent in the traditional fee-for-service method of health care delivery. Second, they had the financial responsibility (and risk) for a full spectrum of services that permitted and encouraged innovation in finding more cost-effective ways of delivery. Their method was truly "revolutionary," as evidenced by the "welcome" they and their providers received, and still do, from the medical community.

The performance of these early programs did provide a stimulus for federal support in 1973 to aid in the growth of this approach to health care. Since then, we have seen the popularity of the "managed care" concept lead to a wide variety of entities calling themselves such, including some that do not provide or arrange for the provision of care. Not all "managed care" entities today embrace and implement these key concepts as fully as the forerunners. The meaning of "managed care" has blurred. The resulting confusion can lead to hasty, if not erroneous, conclusions about success or failure in this arena of health care.

How do we determine if we have been successful? Unfortunately, Professor Herzlinger did not share with us how we should measure success. If it is measured as a percentage of the GNP or a ratio of the medical cost (all costs for all citizens) inflation to the general inflation rate, we may never reach success, even with significant improvement in costs. The forces of increasing technology, of an increasing percentage of the population moving into high medical need, and of the difficult-to-control expectations of health care by patients and society all work to raise total costs. If we can reduce costs by 10 percent per case for care for a specific disease, we have achieved lower costs. Yet, if the total number of cases rises by 15 percent, total expenditures will rise. Is this success or failure? Perhaps we are expected to limit the rise in cases. We know that is not easy, and many illnesses and conditions are not under the control of the health care industry. The clearest example today is our societal problem with drug abuse, with its effects on pregnancy and pregnancy outcome and its contribution to the incidence of AIDS.

Perhaps we ought to say that our society, including the health care system, has so far failed in the area of medical care costs. The article did not seem to say so. It appeared to zero in on the managers of health care as the guilty set. The issue is more complex than that. Yet, I think Professor Herzlinger is correct in citing the lack of management that is appropriate to, and aware of, the purpose of an entity as contributing to failure. The four areas she cites (operation administration, human resources, control systems, and management philosophy) are appropriate areas for more focused attention. They are areas long overdue for the kind of attention she calls for. This attention is needed in most organizations in health care, be they government or private, for-profit or not-for-profit, fee-for-service or prepaid. Organizing care so there is true service to the patient, having the right personnel with appropriate rewards (including more than monetary), delivering that service consistently, having good information systems that provide the tools for appropriate medical management (not just financial management), and having the commitment of top management for these changes is a huge, unfilled need. Professor Herzlinger has done well to remind us.

One wonders if the various entities had paid attention to details, which, as noted by Professor Herzlinger, too often has not been the case, would we in fact have "won?" It is not clear we would have. I suspect that many, if not all, have as a key organizational goal their financial survival. Those with income related to the services provided, even if costs have been controlled and efficiency maximized, can be expected to perform as any business would by gaining as much increase in the volume of services as possible to improve their financial performance. It does not take much imagination to see that one technique is to create a need for a service in the public's mind, hoping to be the source of service provision. That is good business sense. Is it good health care? It may or may not be. Will it control costs? It may control costs per unit, but units consumed will rise. Is there a solution to this part of the cost problem? Unfortunately I know of none in our present system, short of the social conscience of those responsible.

Professor Herzlinger stopped short in her article concerning one problem area, which leaves me curious about her views. Curious about the basic purpose of health care entities. Curiosity sparked by her closing sentence, which includes, "the rewards will come to those...who put into effect managerial philosophies that reflect organizational goals." Curiosity about these key issues:

* What should organizational goals be?

* What will the rewards be?

We face a paradox in answering these questions. Entities that derive their income from units of services or goods can be expected to behave in the accepted business way of increasing volume. Can we expect altruistic values to prevail? Who, in a position of responsibility in such an entity, will be willing to speak out to curtail volume if such curtailment will address national utilization and cost problems while jeopardizing the entity? In some spheres, this could be career suicide. At the least, such behavior would not be considered a model in today's business environment of equipment and supply manufacturers, drug companies, most care delivery entities, and even in many physician's offices. Who is willing to sacrifice profits, or even existence, for the common good? I doubt enough entities will do this voluntarily. Yet, if we are to have a revolution, if we are to get a semblance of control over the overall costs of health care, our mindset has to be changed. Those individuals brave enough to speak out and redirect our priorities need to be supported and joined by others who down deep know what is needed to bring about a significant change.

Health care has had, has, and will continue to have those who work for such changes. Examples include the decrease in the frequency of visits recommended for child wellness care compared to 20 years ago, the studies and articles showing the lack of cost effectiveness of complete physical and multiple diagnostic studies on an annual basis, present and planned studies on new technology, the effectiveness of ambulatory substance abuse treatment compared to inpatient treatment, and many more. At the level of the individual physician, many have tried to educate their patients on the ineffectiveness and waste of using certain medications bor certain illness; the use of antibiotics for viral infections comes to mind. Widespread implementation of changes based on much of this information has not been easy. It requires painful change that can affect income. There is not much reward in working for these changes except the internal reward of knowing a contribution has been made. I doubt that kind of reward is considered satisfactory to the entrepreneur whose goal is to turn a healthy profit or to investors. In general, efforts that carry the highest chance for success in producing significant changes in utilization and cost will necessarily be adverse to individuals and entities who depend on unit consumption for their profits.

Looking beyond our shores, we can find an effort I consider a significant, successful "revolution." In France, Dr Emile Papiernik was the key figure in changing the approach to and delivery of prenatal care, resulting in a significant drop in the rate of low birthweight babies. [1,2] Key features to his approach were to concentrate on "low-tech" services, change the expectations of women concerning prenatal care, enlist support from more than the medical community, and apply these changes to the entire population of a community. It was a change in system based on existing knowledge and required no new inventions or technology. What is encouraging is the number of articles attesting to the adoption of his techniques for limited populations in the United States and the personal knowledge of adoption in one managed care system not yet noted in the literature.

Medically, changes such as these are exciting. There is improvement in quality and cost. There is less need for high tech and less utilization. For some providers, there must be less volume of service provided, if not profit. We need to support, publicize, and foster such changes. Are we ready to take the steps to make such drastic changes in how care is delivered to an entire population, rather than small pockets? Should we be? What is preventing us from taking these steps?

After a significant number of years in prepaid medicine, I am still encouraged about the possibilities for cost improvement in such a system. The separation of compensation from the number of service units provides the incentive for shrinking resource consumption. Doing so is not easy. Providers in such entities are educated in the same settings as other providers and are

not completely isolated from pressures of community patterns of practice. Trying to change expectations about what health services can and cannot do is a challenge. These entities face the overwhelming task of evaluating existing and new procedures to determine what is really effective and when use is indicated.

Concern does exist over whether prepaid managed care entities can exert enough influence to develop the needed "critical mass." There is concern that most of Professor Herzlinger's criticism is applicable to them. Concern that the less separation there is between compensation and units of service, and the degree is not the same in all prepaid programs, the more difficult it will be to produce needed changes. I believe there is still hope and possibility for their continuing influence. I am now less sure there will be enough time.

Professor Herzlinger seems to be optimistic. She says there will be a next wave of entrepreneurial enterprises in which the shortcomings of the past can be overcome. I hope so. Yet I suspect the next wave, too, will not be a revolution won if we limit corrections only to the "within the entity" concept. This will be especially true for those whose survival depends on "units" sold. There is no question that corrections at that limited level will result in "shake-out" of the less effective. But business being what business is, I suspect we will see creative ways of developing additional demand so additional services are perceived as needed and are provided.

What is needed for a true revolution is an expanding sense of what the impact of isolated actions will be on the community as a whole. Should some physicians' incomes be stratospheric compared to those of other highly educated people, or even to many other physicians? Should the fears, confusion, and concerns of society be exploited to create a market? Should something be done about limiting services of dubious value? Should we stimulate serious thought and action to reduce service resource excess? Should we ignore the growing number of our fellow citizens without some form of insurance, even though fully employed? Should they go without while liposuctions, executive lhysicals, elective augmentations, and reductions of body parts continue to consume resources and dollars?

Perhaps now is the time for physicians in management to find improved ways to speak out and provide additional or new leadership in the interface with the business side of health care, to include in that leadership sensitivity to the community in addition to the entity they serve. Perhaps leadership will help us achieve the needed "critical mass." Perhaps it is time to reawaken to our profession's historic context of service.



[1] Papiernik, E. "Proposals for a Programmed Prevention Policy of Preterm Birth." Clinical Obstetrics and Gynecology 27(3):614, Sept. 1984.

[2] Papiernik, E., and others. "Prevention of Preterm Births: A Perinatal Study in Haguenau, France." Pediatrics 76(2):154, Aug. 1985.

Frank J. Volpe, MD, FACPE, is Medical Director, Sanus/New York Life Health Plan, Houston, Tex. He is a member of the Board of Directors of the American Board of Medical Management. He is also a member and past Vice Chair of the College's Society on Managed Care Organizations.
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Title Annotation:Health Care Management
Author:Volpe, Frank J.
Publication:Physician Executive
Date:Mar 1, 1990
Previous Article:Who lost the health care revolution?
Next Article:The revolution revisited.

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