Academic journal article Frontiers of Health Services Management

Physicians as Executives: Boon or Boondoggle?

Academic journal article Frontiers of Health Services Management

Physicians as Executives: Boon or Boondoggle?

Article excerpt


It should come as no surprise to any observer of trends in the U.S. healthcare delivery system that physicians are taking a keener interest in the organization and management of that system. The practice of medicine has become, to a large degree, overtaken by events. Managed care and system integration have tended to place decision making at points further and further removed from patient care, the natural purview of the physician. It is to regain the initiative on how patient care is provided that physicians are moving in greater numbers into management. It is our contention that this move portends well for the future of the system. The unique advantage of the physician executive is the ability to bring to bear on healthcare management an understanding of the clinical processes that are its essential content. With strong clinical credentials and excellent management training, the physician is poised to make significant contributions to a healthcare organization's success.

It is easy, in discussing the current level of activity and change in the U.S. healthcare delivery and financing system, to lose one's bearings. The pace of change makes Alvin Toffler's 11980j observations seem quite tame:

Humanity faces a quantum leap forward. It faces the deepest social upheaval and creative restructuring of all time. Without clearly recognizing it, we are engaged in building a remarkable new civilization from the ground up. This is the meaning of the Third Wave.... Tearing our families apart, rocking our economy, paralyzing our political systems, shattering our values, the Third Wave affects everyone. It affects all the old power relationships, the privileges and prerogatives of the endangered elites of today, and provides the backdrop against which the key power struggles of tomorrow will be fought.

It is nearly two decades after that was written, and those power struggles are under way in the healthcare field. The old power relationships are dissolving, much as Toffler predicted. Hospitals and physicians, once the premier powers in the delivery system, have seen their authority increasingly diluted by the emergence and tenacious development of managed care systems, integration, and a host of other approaches to healthcare financing and delivery that seem to mean exactly what Toffler envisioned-the building of a "new civilization from the ground up."

The seeds of today's changes were planted in several ways: hospital growth due to scientific achievements, increasing demand for technologies, and pioneering efforts to change healthcare financing mechanisms by Blue Cross, Blue Shield, the indemnity insurance industry, and early managed care programs. However, substantial commitment of federal government funds to healthcare, first with the Hill-Burton hospital building legislation in 1946 (now out of existence) and then with the Medicare/Medicaid healthcare financing legislation in 1965, watered already very fertile soil. These two programs, and the federal end-stage renal disease program that followed them, represented very sizable infusions of federal funds into the healthcare system. The ultimate result of all these public and private initiatives was to make already powerful hospitals the center of a healthcare system showered with money. And, while physicians were slightly outside the center of power, they had a commanding voice in how a very large amount of healthcare money was spent. If money does indeed speak, the growth of federal outlays for healthcare services depicted in Figure 1 suggests shouting.

The quest for cost containment, and rationality, by those who pay this country's healthcare bills has encouraged a nearly uninterrupted stream of tinkerings with the healthcare system since 1965. The tinkering began almost immediately, with the Regional Medical Programs and Comprehensive Health Planning Agencies of the 1960s, and continued with the Prospective Payment System and the Resource-Based Relative Value Scales of the 1980s. …

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