Content uploaded by Thomas H Lee
Author content
All content in this area was uploaded by Thomas H Lee
Content may be subject to copyright.
A preview of the PDF is not available
The Shifting Mission of Health Care Delivery Organizations
Abstract
New payment models reward health care providers for producing outcomes rather than for performing procedures. Drs. Richard Bohmer and Thomas Lee examine the implications of this shift for the mission and operations of health care organizations.
... While high process quality indicates a faithful adherence to evidence-based care standards (Donabedian 1988), improving process quality may result in considerable costs for hospitals. The healthcare industry often faces rapidly evolving knowledge of what is called best practice (Bohmer andLee 2009, Senot et al. 2016), and indeed, the list of process quality metrics is updated regularly (Mitchell 2014). Although timely adjustments to the new standards may lead to better health outcomes, such activities are likely to incur additional time and cost to coordinate systems, enhance training, and provide corrective feedback. ...
This study explores whether and how lower variations in clinical practice relate to hospital operational performance. This relation is critical to the overall search for pathways that will allow the healthcare industry to bend the cost curve, implying significant implications for practice and regulators. We define practice variation as all variation not resulting from patient mix and construct a novel measure using inpatient discharge data for each patient cohort having an identical medical condition. Hospitals in our data set show a broad practice variation spectrum. Using statistical process control (SPC) as a theoretical lens, we hypothesize the negative impacts of practice variation on operational performance. We also consider intervening impacts of hospital quality evaluations on the relationship. Analyzing six years of data from hospitals in NY and FL states using a dynamic panel system GMM estimator, we find that higher practice variation relates to longer average patient length‐of‐stay and higher total cost per capita. This phenomenon is even stronger when a hospital provides services with higher quality in patient experience because such a hospital tends to provide more responsive care to patients, which is often resource‐intensive. By delving into granular dimensions of practice variation based on detailed charge data, we find that higher care‐delivery practice variation (i.e., the provision of healthcare) is directly associated with poor operational performance. We also find that pursuing higher quality measures may be harmful to some hospital operational performance measures as they have combined effects with the test‐ordering practice variation (i.e., detecting disease and monitoring its status). Taken together, these findings imply that careful attention to the two dimensions of practice variation and the nuanced joint relationship with quality measures may address the trade‐off between high quality and low cost, and provide room for improvement in practice, ultimately reducing waste in the healthcare industry. Our measure of practice variation also contributes since it enables researchers and managers to rigorously measure and visualize the status of hospitals' practice variation linked to hospital operational performance.
... Any organization that endeavors to undertake significant change for the sake of both improved quality and reduced cost will gain insights from the complex cross-currents comprising healthcare delivery. Organizational development scholars have long noted the importance of inclusiveness (Bohmer & Lee 2009) and autonomy (Dawson 1994) in effecting meaningful change; yet, little research traces the comparative benefits for an organization and society through the treatment effects of such changes. Part of the problem stems from self-imposed methodological limitations, which have in a sense been bi-polar. ...
Much is broken in the systems designed to deliver human healthcare. Without a fundamental reassessment, involving new sources of capable leadership, there is reason to doubt society's capacity to guarantee the availability of basic healthcare for future generations. Confronted by the "iron triangle" of cost, quality, and access, healthcare is awash in seemingly irresolvable tradeoffs. However, management research may provide some promising pathways, particularly through the implementation of internal processes that embody entrepreneurship. Towards this end, we develop and test the linkage between sustainability and intrapreneurship. Employing a matched pair sample of hospitals from diverse American cities, we investigate the extent to which intrapreneurial nurses influence healthcare outcomes. Our findings reveal that nurses are decisive in exerting material, positive effects on the sustainability of life-enhancing healthcare.
... Public and nonprofit hospitals also tend to demonstrate greater risk aversion (i.e., holding more cash) than for-profit hospitals (McCue, Thompson, & Dodd-McCue, 2000). Although the effects of recent healthcare-industry changes, such as a shift from pay-for-service to pay-for-outcomes (Bohmer & Lee, 2009), on sectoral differences remain to be seen, such changes may erode these differences. Nonetheless, general expectations around hospital sectoral differences suggest that private hospitals should focus on maximizing profits by attracting new patients, providing premium services, and emphasizing the quality of care. ...
Organizational identity is an important concept in organizational theory, as it can contextualize the behavior of organizations and members. The literature presents divergent perspectives on organizational identity: some studies have characterized organizational identity as constrained by institutional forces, whereas others have contended it is socially constructed by organizational members. Studies have largely focused on the former perspective, measuring organizational identity by sector affiliation; the latter approach has rarely been empirically tested. Therefore, in addition to sector affiliation, this article proposes a different approach to operationalizing organizational identity by examining hospitals’ mission statements. The study also examines which of these dual forces have more predictive power regarding organizational performance. Together with hospitals’ sector affiliation, we test how the presence and frequency of mission statement language regarding access, cost, quality, or unique organizational values affect hospitals’ various performance metrics. Regression analyses with 172 acute hospitals in Florida reveal significant relationships between types of mission statement content, sectors, and performance indicators.
... Any organization that endeavors to undertake significant change for the sake of both improved quality and reduced cost will gain insights from the complex cross-currents comprising healthcare delivery. Organizational development scholars have long noted the importance of inclusiveness (Bohmer & Lee 2009) and autonomy (Dawson 1994) in effecting meaningful change; yet, little research traces the comparative benefits for an organization and society through the treatment effects of such changes. Part of the problem stems from selfimposed methodological limitations, which have in a sense been bi-polar. ...
Across the social sciences, there is a growing recognition that rural innovation and entrepreneurship are at the front lines of responding to increasing dynamism and complexity in social, cultural, and economic environments. Yet, a review of the disparate literatures on rural venturing reveals that this research has largely escaped the attention of management and entrepreneurship scholars. Our analysis suggests that scholarly progress has been forestalled by three interconnected research practices: gap-spotting scholarship, decontextualized theory building, and an allegiance to binary oppositions. In response to the challenges posed by these practices, this article identifies three alternative, multi-paradigmatic research tools to enhance the effectiveness of management scholars in contributing to multi-disciplinary fields of inquiry such as rural entrepreneurship: problematization, hybridization, and contextualization. Through the application of these tools, we develop new avenues to consider the complex interplay between community, space and place, novel innovation pathways, the power of traditional values and contexts, and the varied nature of modern business venturing. Our work also contributes fresh perspectives on the manner in which management scholars can offer more effective conceptual leadership in multi-disciplinary fields to theorize complex phenomena.
This study explores the interpretations of a recently implemented value‐based healthcare (VBHC) approach within a Danish healthcare region. We examine managerial perceptions of VBHC and how it seeks to balance quality and cost while incorporating patient perspectives. Our research involves interviews with hospital managers at different organizational levels, where we delve into their explanations of how they approach VBHC. Applying institutional logics, our case study reveals the complexities inherent in public healthcare management's understanding of integrating patient perspectives. We find that at the regional level, VBHC guidelines primarily emphasize quality indicators, suggesting a strategic focus on quality over finances due to the absence of cost guidelines. Consequently, we identify a unified accentuated willingness among managers to transcend the traditional focus on productivity associated with New Public Management. In this context, department managers highlight intuitive decision‐making approaches and innovative initiatives, which are decoupled from cost information. This decoupling is attributed to a lack of financial expertise at the department level. These managers rely heavily on notions of appropriateness in their reflections on VBHC. On a department level, the term “value” is interpreted as representing the patient perspective, rather than being solely a monetary value of outcomes. Although the latter is often indirectly embedded in decision‐making processes, we posit that nuanced aspects of decision‐making and the collective logics mobilized at various levels of hospital management, particularly in relation to VBHC, remain underexplored areas in the accounting literature.
The formation of an accountable care organization in a rural environment for the efficient and high-quality delivery of health care.
The emergence of Accountable Care Organizations (ACOs) in the landscape of the U.S. healthcare system marks a paradigm shift in healthcare operations. The potential impact of ACOs has been a topic of intense debate. Traditional analytical approaches do not lend themselves to examining the complex phenomenon of the emergence and growth of ACOs in the healthcare network. We adopt a complex adaptive system lens to examine the growth of ACOs among physician groups and explore factors that influence this growth. We also discuss the impact of ACOs on the profit of physician groups. An agent-based model was built to simulate physician groups’ ACO entrance and exit based on a set of simple rules and their complex interactions with other agents. Based on the simulation results, we derive patterns of ACO expansion and contraction, following four stages of wait-and-see, rollercoaster, fast growth, and stabilizing. Findings suggest that the growth of ACOs is sensitive to the initial state of ACO membership. When the initial size of ACO membership increases, it helps to eliminate the rollercoaster stage. In addition, the growth of the ACO varies depending on the cost–quality tradeoff. When both cost and quality objectives can be met simultaneously, the growth of ACO membership follows wait-and-see and fast growth stages followed by a different stage that we term sticky state. The impact of ACOs on physician groups’ cumulative profit varies by the service quality level of the physician group. Physician groups affiliated with insurance companies charging the lowest or the highest level of health insurance premiums are worse off with the ACO option. However, the ACO benefits physician groups affiliated with an insurance company charging a moderate level of premiums.
Purpose
Electronic Health Records (EHRs) and other Health Information Technologies (HITs) pose significant challenges for clinicians, administrators and managers in the field of primary care. While there is an abundance of literature on the challenges of HIT systems in primary care, there are also practices where HITs are well-integrated and useful for care delivery. This study aims to (1) understand how exemplary primary care practices conceptualized data and HIT system use in their care delivery and (2) describe components that support and promote data and HIT system use in care delivery.
Design/methodology/approach
This paper is a sub-analysis of a larger qualitative data set on exemplary primary care in which data was collected using in-depth interviews, observations, field notes and primary source documents from week-long site visits at each organization. Using a combination of qualitative analysis methods including elements of thematic analysis, discourse analysis, and qualitative comparison analysis, we examined HIT-related data across six exemplary primary care organizations.
Findings
Three key components were identified that underlie engagement with data and HIT systems: data audience identification, defined data purpose and structures for participation in both data design and maintenance.
Originality/value
Within the context of primary care, these findings have implications for effective integration of HIT systems into primary care delivery.
Care for patients with type 2 diabetes has changed from acute reactive services into regular integrated management in the primary care setting. In the Netherlands, with a type 2 diabetes prevalence of 5%, about 85% of the people with type 2 diabetes are treated by primary care general practitioners in practices close to their homes. A few years ago, general practitioners started working under the umbrella of care groups to improve the coordination of the diabetes care in a well-defined region. These care groups involve three to 250 general practitioners and other contracted primary care providers like dietitians, podiatrists, physiotherapists and optometrists. They treat between 400-22,550 patients with type 2 diabetes. The concept of care groups is comparable to organisations in the United States like Accountable Care Organizations. As the main contractor of a bundled payment contract, care groups are fully responsible for the organisational arrangements for the contracted diabetes care and its quality. To improve that quality, it might be important to focus on quality management, especially since many health care providers are involved and organisations are becoming more complex. Quality management comprises procedures to monitor, assess and enhance the quality of care. Most studies on quality improvement strategies focus on performance indicators such as the number of patients having their HbA1c measured. A study in eight European countries showed high levels on process indicators and lower levels on intermediate outcome indicators. Care providers are increasingly obliged to reveal their results on performance indicators and use these results for further improvement of their quality of care. However, it might be important to focus on quality management on organisational level as well, because this could facilitate better quality of care.
The quality management policy within care groups varies, for example in the way they support self-management or provide refresher courses for associated health care professionals. The growing role of care groups in improving performance indicators increases their need for good quality management as well. Their quality management on top of the quality management in individual family practices is expected to be associated with better outcomes.
Patients who need more complex care are referred to an endocrinologist in diabetes outpatient clinics by their general practitioner who acts as a gatekeeper in the Dutch health care system. In these hospital based outpatient clinics, endocrinologists hold the final responsibility for a diabetes team, which involves a diabetes nurse and a dietitian; specialists like ophthalmologists, cardiologists, nephrologists or a diabetic foot team can be consulted as well. Diabetes outpatient clinics treat between 250 and 4,500 patients with type 2 diabetes; one hospital is affiliated with one or two outpatient clinics. Both during and out of office hours patients with acute diabetes related problems (mostly regarding insulin treatment) can consult a general practitioner immediately. Patients treated in outpatient clinics can also call a special ‘diabetes helpline’, organised by the hospital. Within hospitals, quality management systems have been established over the past decade.
Quality management on an organisational level is likely to enhance the delivery of optimal diabetes care. Against this background this study on quality management in care groups and outpatient clinics was designed within the ongoing National Diabetes Action Plan in the Netherlands.
The aim of the thesis was to assess the state of quality management in organisations providing care for type 2 diabetes patients (care groups and outpatient clinics) and the possibilities for its improvement by a one-year tailored intervention. The objectives were:
1. To estimate the levels of quality management in organisations providing care for type 2 diabetes patients.
2. To assess the changes in quality management after a one-year tailored intervention.
3. To study the change in patient centeredness at organisational level after a one-year tailored intervention.
4. To explore the association between quality management of diabetes care groups in primary care and their aggregate performance indicators.
Both the enthusiastic adoption and somewhat lackluster early results of pay for performance have given rise to a broader payment-reform movement, with proposals and pilots emerging from a wide variety of stakeholders and policy leaders. Meredith Rosenthal describes these novel approaches to payment reform.
Hospital-physician relationships (HPRs) are an important area of academic research, given their impact on hospitals' financial success. HPRs also are at the center of several federal policy proposals such as gain sharing, bundled payments, and pay-for-performance (P4P).
This article analyzes the HPRs that focus on the economic integration of hospitals and physicians and the goals that HPRs are designed to achieve. It then reviews the literature on the impact of HPRs on cost, quality, and clinical integration.
The goals of the two parties in HPRs overlap only partly, and their primary aim is not reducing cost or improving quality. The evidence base for the impact of many models of economic integration is either weak or nonexistent, with only a few models of economic integration having robust effects. The relationship between economic and clinical integration also is weak and inconsistent. There are several possible reasons for this weak linkage and many barriers to further integration between hospitals and physicians.
Successful HPRs may require better financial conditions for physicians, internal changes to clinical operations, application of behavioral skills to the management of HPRs, changes in how providers are paid, and systemic changes encompassing several types of integration simultaneously.
RIMARY CARE MEDICINE IS IN SEARCH OF REDEFINItion. Prevalent payment modes have undermined traditional models and reduced workforce interest while some functions of primary care are emerging in new incarnations. Payers find physicians “too expensive” for basic primary care services, and young physicians find their earnings expectations greater than primary care careers can offer. Understanding these market forces could lead to better understanding of required physician expertise within the larger framework of primary care. A more explicit definition of that expertise could lead to more appropriate market valuation of physician services. Fee-for-service reimbursement has undermined good pri
In their June report, the Medicare Payment Advisory Commission (MedPAC) made 3 recommendations intended to create collective accountability across providers for selected hospital episodes. Glenn Hackbarth, Robert Reischauer, and Anne Mutti hope that this set of policies will create an environment that encourages and enables providers to accept bundled payments while also testing the feasibility of this payment design.
For personal use only
- Downloaded From Www
- Nejm
Downloaded from www.nejm.org on August 7, 2009. For personal use only. No other uses without permission.
Beyond pay for performance 1. — emerging models of provider-payment reform Col- 2. lective accountability for medical care — toward bundled Medicare payments
- Mb Rosenthal
- G Hackbarth
- R Reischauer
- A Mutti
Rosenthal MB. Beyond pay for performance
1.
— emerging models of provider-payment reform. N Engl J Med 2008;359:1197-200.
Hackbarth G, Reischauer R, Mutti A. Col-
2.
lective accountability for medical care — toward bundled Medicare payments. N Engl J
Med 2008;359:3-5.
Designing care: aligning the 3. nature and management of health care collaboration: landscape of economic integration and impact on clinical integration
- Rmj Bohmer
Bohmer RMJ. Designing care: aligning the
3.
nature and management of health care. Boston: Harvard Business School Publishing,
2009.
Burns LR, Muller RW. Hospital-physician
4.
collaboration: landscape of economic integration and impact on clinical integration.
Designing care: aligning the nature and management of health care
- Rmj Bohmer