Equipping Physicians To Manage The Rapidly Evolving World of Health Care

A 500-bed hospital has a budget of around $1 billion. That's $2 million per bed, illustrating the need for physicians to be able to harness budgets and resources to improve health results for patients.

On Mother’s Day, 2003, 5-year-old Matthew Siravo, who had epilepsy, died at Boston Children’s Hospital, two days after suffering a seizure that lasted an hour and a half.

Siravo’s story made headlines in the local news, and in September of that year, the Massachusetts Department of Public Health issued what The Boston Globe called “a scathing report” about Children’s mishandling of that case and three others. It said doctors did not order aggressive treatment that could have saved the boy’s life.

According to the report, Siravo died not from medical complications, though his case was certainly complex, but due to a breakdown in communication, a murky administrative structure, poor project management and a pass-the-buck institutional culture – “a situation where lines of authority were deeply tangled, and where no one person had accountability for the patient,” as the Globe put it.

Doctors tending to the boy during his seizure all thought someone else was in charge of his case, which meant none of them ordered the appropriate drug treatment.

In addition to facing a public relations nightmare, the world-renowned pediatric care center was placed into “a kind of probation under which it could have lost the right to treat patients covered by Medicare and Medicaid,” the Globe reported.

More significant was that a child had died unnecessarily and for rather pedestrian reasons: lackluster management and leadership.

Managing One Bed Means Managing $2 Million

This is not to malign Boston Children’s Hospital, which was quick to acknowledge its mistakes and remains a premier institution – it was recently listed at the very top of U.S. News & World Report’s honor roll for children’s hospitals in the country.

Rather, looking back more than a decade later, it provides a valuable lesson. Siravo’s story illustrates the need for physicians to be literate in skills not taught in medical school – skills like managing systems, strategic planning and effectuating institutional change.

A child had died for rather pedestrian reasons: lackluster management and leadership.

Increasingly, achieving high-level medical results depends on the ability of physicians to navigate complex bureaucracies and harness resources, personnel and budgets to make sure treatment is delivered effectively and patients receive quality care.

To do this, physicians find they need to receive training in areas like negotiation, communication and information technology, not to mention budgeting and staff management.

Vinod Sahney, adjunct professor of health policy and management at Harvard T.H. Chan School of Public Health and distinguished university professor of industrial engineering and operations research at Northeastern University, pointed out just how large and complex medical institutions have become in recent years: A place like Brigham & Women’s Hospital, in Boston, has a budget close to $2 billion and staff of about 12,000. It’s a small city.

In fact, any time a hospital reaches close to 500 beds, its budget swells to around $1 billion, he said. That’s $2 million a bed.

Physicians, managing these complex organizations, may find themselves asking, “Was I supposed to earn an MBA on my way through medical school?”

Doctors: ‘They Can’t Do It By The Seat of Their Pants’

Steering large health care organizations takes advanced management, administrative and leadership skills foreign to many physicians, who dedicate the early part of their careers to intense medical training.

Yet, physicians are needed in leadership roles – as team leaders, department heads, chief medical officers and hospital executives.

“Was I supposed to earn an MBA on my way through medical school?”

Barry C. Dorn, an orthopedic surgeon by trade who served as interim president and CEO of Winchester Hospital in Greater Boston and is an adjunct lecturer in health policy and management at Harvard Chan School, said health care systems, “now, more than ever,” are realizing physicians should be in leadership positions, because “they know things non-physicians don’t know.”

“Physicians need to run systems,” he said, but in today’s health care world, “systems are much more complex.”

“In medical school you’re not trained in management,” he said. As a result, when doctors move forward in their careers, they find themselves “in desperate need of training after their medical school training.”

“Physicians must understand that they must get advanced training,” he said. “They can’t do it by the seat of their pants.”

You Are the Head Of the Team

It’s not just department heads and executives who need to develop these skills.

Kasisomayajula “Vish” Viswanath, professor of health communication at Harvard Chan School’s Department of Social and Behavioral Sciences, said that in today’s world “a lot of work is very interdisciplinary,” requiring coordination and communication across departments and training in fields such as negotiation.

Sahney observed that “almost all physicians now practice where they have a team,” referring to the teams of nurses, specialists and office support staff who collectively tend to Internet-connected, well-informed patients. As a physician, “you are the head of the team.”

The ability of physicians to lead institutions will become ever more important.

Improving Care Takes Consistent Management

Siravo’s death laid bare the need for system-wide quality improvements at one hospital, but around the world, health care systems, departments and physicians strive continuously to improve the quality of care for patients.

In the United States, governments have recently jumped into the game as well.

Under the Affordable Care Act, various health care measurements help determine the allocation of funds to hospitals and care groups, Sahney pointed out. Put bluntly, hospitals in the bottom 50 percent – and there will always be a bottom 50 percent – will lose money, he said. That means the ability of physicians to lead institutions in areas of “patient safety, quality [and] patient satisfaction” will become ever more important.

Sahney, who also served as senior vice president and chief strategy officer for Blue Cross Blue Shield of Massachusetts and spent 25 years as senior vice president at the Henry Ford Health System, based in Detroit, recalled some of his work at Henry Ford, where the surgical department was ranked in the bottom 30 percent in the country.

After two years of “very consistent management leadership,” the department moved into the top 90 percent.

To make that leap forward, there were “a lot of little things to do correctly,” he said, adding, “There is no magic bullet.”

One of those “little things,” for instance, was simplifying the coding system physicians used to record surgical procedures – a coding system that determined payments from insurance companies. Physicians hated the system because it had 1,800 codes to choose from. It’s not hard to imagine a time-pressed surgeon conducting four procedures on a patient but entering the code for only one procedure, leading to a loss of revenue for the hospital. The department established a new coding system that was broken down by specialty, so orthopedic surgeons, say, weren’t scrolling through codes relevant only to colorectal surgeons. The change helped improve care and department revenues.

‘None Of It Is Stable’: A Period of Rapid Change

“The health care marketplace is changing so rapidly,” Dorn said, citing evolving systems and government involvement as factors. “None of it is stable,” he said, and just like Medicare has changed since its inception, the Affordable Care Act “will look nothing like that 15 years from now.” In other words, he said, “It will be modified ten different ways to Sunday.”

Health care groups, hospitals, departments and physicians will need to be nimble in order to survive. But nimble doesn’t mean small. Dorn predicts “more and more regionalization,” with hospital mergers and closures leading to even bigger, more complex organizations.

Sahney pointed to a growth in ACOs – accountable care organizations – driven by the Affordable Care Act. ACOs are networks of health care providers that receive financial inducements to provide patients with more efficient care.

Or, as Sahney put it, “Any dollar you save, you keep it.” In such an efficiencies-driven environment, effective management becomes important. Physicians need to be prepared to navigate those economic forces.

The Affordable Care Act will also encourage prevention, as opposed to costly treatment, which is a change in course for many health care organizations. That will require new vision, and “from an organizational leadership perspective … how do you encourage your staff?” Viswanath asked. Getting colleagues to buy into your vision will become key.

Forget Herding Cats, Try Herding Health Care Professionals

Instituting such changes takes communication, negotiation and persuasion.

You “have to persuade others to buy into your vision and work with you in executing that vision,” said Viswanath. You have to “marshal resources … intellectual resources, human capital … mobilize different groups of people.”

Health care groups, hospitals, and physicians will need to be nimble in order to survive.

That’s not easy, especially because physicians are smart, highly trained people. “You can’t do it by edict,” said Dorn, who observed that among large physician groups, “everyone is resentful of everyone else.”

“There’s a lot of tribal behavior … a lot of territorial issues,” Sahney said. Physicians, nurses, pharmacists and the like won’t be bossed around, and this creates “an environment where leadership skills, management skills, are crucial to progress,” he said.

If you’re a chief medical officer who oversees 900 to 1,000 people, that’s “more difficult than almost any other job,” Sahney said, “because you’re dealing with very educated people … and you’re trying to convince them to all move in the same direction.”

Dorn, providing an example, said one of the classic stories is about a manager who tells his department they need to cut 25 percent across the board.

“That’s the absolutely wrong thing to say,” he said. Instead, tell the department you need to increase revenues by 25 percent and ask, “Do you have any ideas?”

‘You Have To Be Able To Ask The Right Questions’

Sahney, who has helped teach management-training programs for physicians three times a year since 1977, said these are skills that can be taught. But it takes time.

The programs he participates in are two weeks long, and in the early days physicians asked why they needed two weeks of training as opposed to two or three hours. He’d respond: “If you can teach me medicine in two to three hours, I’ll teach you management in two to three hours.”

“Just like you have sub-specialties in medicine, you have sub-specialties in management,” he explained, saying the purpose of the training is to give physicians a broad base of understanding, not to make them experts. “[It’s] just like there’s art appreciation class in college, music appreciation class in college – we’re not turning you into musicians,” he said. Rather, “You have to be able to ask the right questions.”

Consider what goes into creating a financial balance sheet, Dorn said. “You don’t need to know how to do it” – chief financial officers conduct that work – but, “You need to know how to read it.”