In today's healthcare system, physicians face challenges from every sector: from patients questioning treatment to payers seeking control to employers demanding value and accountability for every dollar spent.
In the midst of this mayhem, lawmakers are looking at possible legislation that would allow doctors to play a larger role in the delivery system of the future. But is the physician community ready for such a challenge?
Physicians have been reluctant participants in the changes that have taken place in healthcare during the past two decades. Most of the participation that has occurred has taken the form of membership in physician organizations--independent practice associations, physician-hospital organizations, management service organizations and fully integrated medical groups. Of these, IPAs have perhaps provided the greatest potential for physicians to retain some degree of autonomy in the delivery of healthcare. By virtue of their structure, IPAs permit doctors to actively participate in the changing delivery system and they reduce the need for a substantial infrastructure.
All of these organizations, regardless of their design, have experienced successes and failures. In the early 1980s, in California and other markets, bankruptcies were rampant among medical groups and IPAs. Many of those failures were attributed to poor governance and inadequate reporting systems. Now California is experiencing a new wave of IPA bankruptcies, ironically for the same reasons.
One could assume that those heading up the failed groups didn't receive enough training or education in the effective management of IPAs, because in analyzing the failures there are common threads: poor governance, inadequate information systems and a lack of solid financial management.
The healthcare delivery system of the future should be greatly influenced by medical providers. However, as I travel across the country, I constantly encounter physician organizations in which managerial leadership by physicians is scant. I also see organizations in which physicians have taken an active role in day-to-day operations, and these organizations appear to be performing better by every measure.
If lack of leadership and balanced governance are the key reasons physician organizations fail, both emerging and established groups would be well advised to ensure they do what's necessary to acquire both. In governance, the primary consideration is the role of the board and the board members' fiduciary responsibility to the organization.
Often, physician groups' boards are dominated--and ultimately directed--by the most influential physician. It's important to remember that the guiding principle of a good board should be one-member, one-vote, regardless of the issue at hand. At the same time, physician organizations need to examine the critical role their business managers play and adequately compensate those individuals for the value they bring.
In deciding who will lead the organization, the tendency often is to choose the physician who has high standing in the community for his or her clinical skills.
This can be a mistake because the qualities that make a good medical director are not always the same as those needed to effectively run an organization. The physician leader should be someone who not only has vision but also understands the use of business systems and data and knows how to develop policies and procedures.
If the future healthcare delivery system is to be well served by physician leaders, physicians must seek appropriate business training--through universities, specialized programs and whatever other avenues are available.
There are many excellent training options. The College of Physician Executives in Tampa, Fla., offers a top-notch program tailored to meet the needs of practicing physicians. AMA Solutions operates a good program, as well, through the J.L. Kellogg Graduate School of Management at Northwestern University. In addition, various universities offer appropriate MBA programs. The programs needn't be focused on the healthcare industry to provide physicians with the basic business skills they need. Finally, the IPA Association of America, through its recently created Physician Educational Institute, offers targeted 24-hour programs covering the basic principles of management theory. The programs will be presented across the country in conjunction with major universities and the American College of Medical Practice Executives.
It is naive to think that the mere training of physicians to be managers will ensure the success of physician organizations, but doctors who have acquired knowledge about sound
fiscal and management practices have the potential to be the best leaders.
Holloway is president and chief executive officer of the Oakland, Calif.-based IPA Association of America.