Clinical Issues in Health Care Management Research Paper Starter

Clinical Issues in Health Care Management

Health care management in the twenty-first century faces a complex web of interrelated issues. Among them are questions of organization (solo versus group practice; independent hospitals versus large regional systems); issues of payment; and the role for new information technologies (electronic health records, clinical decision support systems). These questions represent the critical issues facing health care providers in the health industry. The aim of this essay is to explore how the changes occurring in the delivery of health care affect physicians on an organizational and personal level.

Keywords Electronic Health Records; Evidence Based Best Practices; Evidence Based Medicine; Health Care Delivery; Managed Care; Physician Hospital Organization; Vertical Integration

Health Care Management: Clinical Issues in Health Care Management


For centuries, families provided medical care in the privacy of their homes. Doctors were called in as a last resort only when home remedies appeared to have no effect. Unfortunately, most doctors had few effective treatments beyond what untrained family members could provide. Doctors largely provided institutional care to the poor, the aged, or others without family resources.

This grim picture began changing as research in medicine expanded, resulting in the development of new treatments, tools, and technologies that were beyond the scope of the medical care that family members could provide. As the practice of medicine changed, corresponding changes in the organization and structures of health care delivery changed also. Hospitals became less like charitable institutions and more like scientific places where doctors were provided with requisite clean, antiseptic surgical suites and exam rooms, and nurses executed doctors' orders in the controlled environment of hospital wards.

An unchanging factor during this transformation of medical practice was the position of authority demanded by and provided to the doctor (Starr, 1982). Doctors maintained their authoritative position through strictly controlled access to medical education, licensing regulations promulgated by state governments (often at the behest of state medical societies), and a professional monopoly on clinical information. This authoritative position was reinforced by the professional esteem, trust, and respect bestowed on doctors by the public.

In the mid-1960s, a watershed event swept the healthcare industry with the establishment of Medicare and Medicaid, government programs that supplement or provide medical care for elderly and poor Americans. This event sparked explosive growth in the number of patients and the number of health facilities and providers ready to treat them. This was closely followed by explosive growth in health care costs. Health care costs (expressed as a percent of gross domestic product) grew from 5.7 percent in 1965 to 8 percent in 1975, to 10.3 percent in 1985, and has continued unabated to the present day (White, 1999). In 2011, health expenditures in the United States accounted for 17.9 percent of GDP (World Bank, 2013). With the rising costs of medical care, the dynamics among the key players in the health care industry began to change. Where doctors once practiced in solo or small group enterprises, large multi-specialty clinics were established to compete for the greater number of patients available. Where doctors once set their own fees and handled their own collections, third-party payers and alternative payment systems sprang-up in an effort to control rising costs. Hospitals, which once walked a fine line in their relationship to the medical staff, now began implementing quality improvement guidelines to address issues of risk management and to competitively position themselves as the best providers in regional health care markets. The medical staff was expected to follow the hospital administrator's lead and comply with new procedures in risk management and quality improvement.

In the following sections of this essay, the impact of these dynamic forces on physicians at the clinical care level is examined. First, the changes in the organization and practice of medical care are investigated followed by the effects of these changes on the individual physician at a personal level. Issues of autonomy and ethic are also considered.

Organization Changes in Physician Practice Structures

Until approximately 1980, the organizational structure of a physician's practice was solo or small groups of single or multiple related specialties. Hospitals provided the physical facilities for inpatient care and outpatient care that required capital financing for major equipment such as sophisticated diagnostic and imaging technologies. The medical staff of hospitals was composed primarily of local doctors who were granted privileges to practice in the hospital. In exchange for these privileges, doctors would staff emergency rooms, share on-call responsibilities, and participate in medical education and training programs (Pham & Ginsburg, 2007). Privileges were granted based on licensing and accreditation requirements. Physicians were largely unaccountable to anyone but their professional colleagues and only the grossest of unethical, mistreatment, or malpractice incidents were cause for revoking privileges (Pham & Ginsburg, 2007).

In the 1980s, a shift occurred in the organization of physician practices from solo or small group practices to large group practices. In most cases, these large group practices were composed of specialty physicians as opposed to primary care physicians such as family medicine physicians, pediatricians, or general internists. An incentive for moving to large group practices was the incentive for increased billings under fee-for-service arrangements.

As the number of new medical technologies and treatments increased, the costs for providing these clinical advances increased correspondingly. Beginning with the Medicare prospective payment system, managed care organizations (MCOs) and health maintenance organizations (HMOs) and other third-party payment structures emerged to contain the rising costs of health care through capitation. In contrast to fee-for-service reimbursement, where the physician billed each service or medical event based on his/her experience or on what was considered to be “usual and customary” in his practice area, capitation set a fixed fee per patient negotiated in advance of any medical event. Under capitation, a physician provider or hospital knew in advance that the insurance plan or HMO will only pay for the predetermined contracted amounts for each service delivered or each medical event treated. In this arrangement, the risk of paying for a medical event is shared between the payer (the health plan) and the provider (physician or hospital).

One impact of these new payment structures was to restrict the patient's choice of doctor and frequently the doctor's choice of treatment based on what the payment provisions of the plan were. It is no surprise that as employer-contracted MCOs became the norm for financing health care, as there was a backlash by consumers and physicians objecting to these restrictions.

Move to Vertical Integration

As financial risk increased under capitated payment mechanisms, hospitals faced the need to exert more control over their operating expenses. This was accomplished by vertical integration. One approach to accomplishing this was...

(The entire section is 3266 words.)