208
THE APPLICATION OF MANAGEMENT SCIENCE TO THE DELIVERY OF MEDICAL CARE IN MEDICAL AND DENTAL PRACTICES* RUDOLPH H. FRIEDRICH, D.D.S. Formerly Executive Secretary, Committee on Public Health The New York Academy of Medicine
JOHN DALTON, M.E., M.B.A. Manager, Management Advisory Service Staff Haskins and Sells
FRANK E. TAQUINTA, M.D.t Director, Ambulatory Care Service The Roosevelt Hospital New York, N.Y.
Oq NE of the most impressive images presented in television commercials is the advertisement for automobile tires which describes the most critical point of performance as "where the rubber meets the road." The viewer is given the feeling of the many factors, such as pressure, friction, heat, and wear, which affect the performance of the tires. The manufacturer uses this message to call attention to the programs of research and testing which support the contention that his tires assure your safety. Similarly, we suggest that practicing physicians and dentists, along with members of allied professions and ancillary professional persons, should concern themselves with the measurement and analysis of the conditions under which their patients meet the process of medical care, in order to identify the factors that affect the patient's perception of the system by which medical care is delivered. It has been demonstrated that such analyses-developed through the combined efforts of those who operate the process of medical care and of skilled management engineers oriented to that process-can produce data which will lead to the effective func*Presented at the annual meeting of the American Association for the Advancement of Science held at the Americana Hotel, New York, N.Y., January 28, 1975.
tNow Chief of Medicine, New Rochelle Medical Center, New Rochelle, N.Y. Address for reprint requests: Rudolph H. Friedrich, D.D.S., 1612 Marion Avenue, Emerald Point, Punta Gorda, Fla. 33950
Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
209
tional organization of facilities and staffing patterns that are used. The application of sound principles of management and technology to medical care organizations can assure continuing adaptation of the delivery system to the requirements of the increasingly knowledgeable consumer, and to the demands of governmental agencies and other third-party payers who insist on cost-effective care. Proven techniques of management science offer a sound alternative way of meeting the complex pressures that face the health professions. These pressures are often identified by such cliches as "a single standard of care," "cost containment," "quality of care," "health-manpower crises," and a host of other phrases which have kept the professions continuously in a defensive posture, while nonprofessional and nonpracticing professional persons rationalize a maze of economic, political, regulatory, and manpower solutions for the existing problems. The word "management" arouses fear in the majority of health professionals. Apparently they view management science as a discipline lodged in nonprofessional hands which will ultimately eliminate the responsibility and authority of the health-care professionals for making decisions in diagnosis and treatment. The concept of group practice arouses the fear also of an imposed external discipline in which the individual participating physician has no access to policy. Further, the concept of group practice that is publicized in the literature emphasizes forms of group practice in which medical professionals are hired employees rather than full partners. There are several organizational designs of group practice that have demonstrated their attractiveness to providers, patients, and fiscal agencies. None of these are universally applicable, nor will one model of group practice ever be adaptable to every situation. Certain principles of management have been identified as applicable to medical care and certain techniques have been developed for measuring and analyzing medical care. These techniques, which are essentially means of quantitating the process of medical care, require refinement and application to several separate components of the process. These techniques differ in form from techniques used in biological research but exhibit a degree of resemblance. The following comparison demonstrates the similarities.
Components of Medical Care 1) History-taking to define problem 2) Examination; accumulation of data Vol. 53, No. 2, March 1977
210
R.H. FRIEDRICH AND OTHERS
210R..REDCHADOHS
3) 4) 5) 6)
Establishment of diagnosis Development of treatment plan Monitoring of treatment plan to point of control Discharge or follow-up Components of the Management Process
1) 2) data 3) 4)
Establishment of problem with client Measurement of the components of problem and accumulation of
Analysis of data and formation of conclusions Formulation of recommendations for solutions 5) Implementation of recommendations and evaluation of results Where imaginative physicians and dentists understand the technology of management and work in concert with management personnel who are oriented to the process of medical care, the development and operation of group practices can be accomplished to the mutual benefit of all concerned. The concept of group practice and of management systems should be recognized as valuable to the health professions and to the patients they serve. GROUP PRACTICE
"Group ambulatory medical [and dental] practice is the physical grouping and integration of all of the professional, management, and fiscal functions of ambulatory medical [and dental] care in the common and individual interests of the patients, the professional, support professional, technical, and management personnel in the practice."4 The primary contribution of the group concept is the benefit which patient and doctor derive from a complete system of management. The cost of this system is shared by a number of doctors and their therapeutic teams. This permits highly trained professional persons to maximize their medical work by freeing them from the routine functions of business management which produce no medical care. MANAGEMENT
If we accept the definition of group practice that is given above, it is clear that we are dealing with an organized medical care institution which must function as an organ of society, fulfilling a need of the community or Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
211
of individual persons in the community. Management is an organ of the institution and has no substance apart from the institution. In order to make the institution function, management must: 1) Ascertain the purpose and mission of the institution 2) Arrange the productive organization of work (production engineering) and provide the leadership which makes the workers achieve (sound personnel management) 3) Identify and manage the social influence of the institution and meet its responsibilities to the patients and the community PURPOSE AND MISSION OF THE INSTITUTION
Medical and dental practices, however they are organized, are publicservice institutions which exist for a specific social function, namely, the provision of medical and dental care to the community. The determination of purposes must be based on an understanding of manpower, physical facilities, and fiscal resources, and on the most effective organization of these resources to maximize the provision of medical and dental care within the financial and educational limitations of the public. Financial and educational or cultural levels of the population determine the pattern of demand for medical and dental services and the rate of that demand during any 24-hour day. ORGANIZATION
OF
WORK
Methods are available for measurement and analysis of the demand pattern, as are methods for assessing the productivity of screeening programs in relation to costs and for determining the volume and kinds of problems that patients bring. With work-sampling it is possible to obtain accurate information on how various categories of professional, ancillary, technical, and administrative personnel spend their time in a given medical practice. The possibilities of measuring specific segments of medical care are limitless; they need only refinement and increased sophistication. The data developed from these measurements can provide basic guidance for the most effective arrangement of staffing and work in the process of medical care. This responsibility of management deals especially with the relations between professional persons, such as physicians, dentists, nurses, oral hygienists, variously designated technicians, and administrators. The more Vol. 53, No. 2, March 1977
212 212
OTHERS AND OTHERS R. H. FRIEDRICH AND FRIEDRICH
detailed the measurement of the process and the more accurate the analysis of functions, the more effective will be the allocation of responsibilities and functions to the lowest level of knowledge and skill consistent with an acceptable quality of performance. These data provide a base from which to determine the scope of the functions that are assigned to the new categories of health worker under the titles of clinical nurse practitioner, physician's assistant, and oral hygienist, and the conditions under which these persons will act. INFLUENCE OF THE INSTITUTION ON THE COMMUNITY
The reputation of an institution, its ability to serve the community's need for health services, and the way in which its staff reacts with individual patients are all of great importance to management. The influence of the institution on the economy of the community, as well as its effect on traffic patterns and parking problems, become concerns of the community. The kinds of patients that the institution attracts and their influence in the community can constitute problems. This is exemplified by the public reaction to the location of methadone facilities in some neighborhoods. These are all continuing problems of management. Techniques are available for surveying and analyzing the attitudes of individuals and communities, and these provide another area in which refinement and increasing sophistication offer challenges to the scientific method. GROUP PRACTICE
Many physicians and dentists have adapted the group principle to individual facets of their practices. Examples are the utilization of commonly owned premises for the conduct of individual practices, the grouping of special technical services (x ray, laboratory, clerical), and the grouping of certain categories of ancillary personnel, such as health educators and dental hygienists. None of the arrangements meet our working definition of group practice for ambulatory patients. As stated earlier, this is the physical grouping of all the professional, managerial, and fiscal functions of ambulatory medical or dental care in the interest of the patients and of all professional, ancillary, and administrative participants. Law and accountancy have a long and successful history of utilizing complete group organization in routine practice. Accountancy firms, for example, have Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
213
included managerial and consultative functions in their structures in order to serve clients fully. A wide variety of organized group-practice arrangements within our working definition functions in law and engineering. In medical and dental practice there are several models of complete group structure. In all too many instances the ambulatory care services of hospitals which developed from outpatient departments still demonstrate a lack of sound management in their operation. The professional staffing of these services is too often dependent on the assignment of members of house staffs, on the requirement that physicians who hold hospital-admitting privileges for their private patients protect these privileges by specified hours of work in the ambulatory care service, or on the use of hired physicians who serve part or full time in ambulatory care. Persons in none of these categories have any professional influence on the policies of the service. The medical care is predictably unsatisfactory. A second example consists of group practices owned and operated by fiscal intermediaries or by union welfare funds to which the professional personnel are attracted through a wide variety of contractual arrangements. These provide varying degrees of professional participation in operational
policies. A third example consists of professional corporations or partnerships of physicians or dentists operating in owned or rented facilitites; the partners or owners of the corporation have a voice in the operational policies under which the managerial function is conducted by senior partners and by employed managerial personnel. The organization and control of group practices varies according to the characteristics of the organizers and their motives in establishing and operating the institution. If we accept the working definition of medical and dental group practice as the means of producing and distributing medical and dental care, we should be able to extend the definition to include ambulatory care as an arrangement of practice designed to produce and distribute 1) preventive care, 2) first-echelon management of acute medical problems, 3) care of chronically sick persons, and 4) rehabilitation services-all with optimal continuity. In the group ambulatory-care practice the doctor must become an effective component of an organization of doctors and ancillary professional persons who provide the comprehensive medical and dental sevices Vol. 53, No. 2, March 1977
214
214
R. H. FRIEDRICH AND OTHERS R. H. FRIEDRICH AND
OTHERS~~~~~~~~~~~~~~~~~~~~~~~
that in the past were provided by the individual general practitioner at a lower level of effectiveness. Good management is a vital component of successful group operation. ESSENTIAL FUNCTIONS OF THE MANAGEMENT OF GROUP PRACTICE
The essential functions of group-practice management may be divided into 10 categories: 1) Functional analysis of the system and its components. These should comprise a continuous effort by management to maintain high effectiveness in the production of care; to decrease overhead expense to the lowest possible level consistent with high-quality care; to assure the convenience and comfort of patients; and to assure the discontinuance of obsolete practices. Analysis will produce the data essential for choice among alternatives in improving the effectiveness of the practice. Probably the most important information gained from this analysis is specification of the functions that can be delegated effectively to ancillary personnel. With the techniques of work-sampling, studies of the flow of patients, and records of contacts with patients it is possible to determine how much of the physician's time is devoted to activities inconsistent with his professional competence. Such studies identify activities that can be performed better by supportive personnel who are stimulated by the challenge of additional responsibility. Advantages gained by removing such functions from the physician include increased concentration on his basic duties in medical care, a more relaxed style of professional performance, and increased time for recreation. When the data obtained from an accurate analysis of his functions are presented to the physician, he becomes aware that his professional schedule can be made less complicated, less frustrating, and less exhausting. 2) Maintenance of professional and technical supportive services. The clinical nurse-practitioner, the physician's associate, and the oral hygienist provide analogous services in preparing data essential to the diagnosis and to formulating the plan of treatment. They also must be able to provide services which are essential in execution of the plan and in monitoring the progress of the patient. Technical services include the operation of 1) a multiphasic screening service which consists of the tests agreed upon by the medical group, 2) an x-ray and clinical photography laboratory, 3) a pharmacy, 4) special therapeutic services, and 5) a health-education service. The scope of these technical services, of course, will be determined Bull. N. Y. Acad. Med.
IMPLICATIONS OF NATIONAL HEALTH INSURANCE
215
by the size and finances of the practice. The remaining eight essential functions of management may be tabulated as follows: 3) Managing patients a) Reception for initial appointment and orientation b) Initial planning of the examination, diagnosis, and treatment; scheduling of treatment c) Coordination of appointments with the doctor's schedule d) Maintenance, follow-up, and health education 4) Maintaining professional records a) Individual records of health services rendered and continuing records of each patient's health status b) Records of performance of the discrete elements of the medical and dental team, follow-up on effectiveness of the treatment, and specification of treatments rendered c) Consolidation of data on the total health-service production of the practice by departments or teams 5) Maintaining financial records a) Individual records of charging, billing, credit, and collection b) Operation of an accounting system for the practice by departments, team income, and overhead c) Periodic cost-accounting and practice analysis by departments and teams, and development of policy amendments indicated by the analysis d) Financial statement of the partnership or corporation; annual reports 6) Communications a) Intraoffice: oral communications, memoranda, telephone calls, reports, and schedules b) Group conferences, policy manuals, and minutes c) External: business communications, professional communications, and public relations 7) Managing Personnel a) Acquisition of personnel, orientation, and training b) Establishment of clear personnel policies (duties, hours, remuneration, and other prequisites of employment which must be under periodic review); continuing educational programs, and Vol. 53, No. 2, March 1977
216
21
R. H. FRIEDRICH AND OTHERS .H
RERIHADOHR
criteria for advancement of responsibilities requiring additional skill and providing higher income; arbitration of personal conflicts; and maintenance of adequate facilities and services for personnel 8) Purchasing inventory and first-echelon maintenance of equipment 9) Maintenance a) Business office b) Staff and conference rooms c) Laundry, heating, ventilation 10) Fiscal operation of the practice a) Banking b) Investment of retained earnings and funding for pensions c) Personal security program of benefits for the entire staff d) Legal services e) Payroll Planning for the development and operation of systems of groups practice must be based on one primary principle: The system of group practice can deliver the most comprehensive, complete, high-quality, costeffective medical care by blending the professional knowledge and skill of doctors, nurses, physicians' assistants, oral hygienists, and technical operating personnel in an efficient, well-designed, and well-equipped common locus-provided remuneration is consistent with a high level of satisfaction and high-quality performance. It is vital that a group practice utilize the services of trained nonprofessional employees to assume the nonprofessional functions such as business activities. Group practice can take advantage of mechanized recordkeeping, e.g., with a minimum number of expensive clerks. Sophisticated techniques of accounting and analysis of practice can be applied more economically to group practice than to individual practice through the stronger financial structure resulting from economies of scale. The nonprofessional administrative functions of group practice can be managed by persons whose time is not as expensive as that of the medical, ancillary, and technical personnel. The Committee on Public Health of the New York Academy of Medicine has sponsored a series of studies of the delivery of medical care as well as specific studies of problems affecting the delivery of dental care. It has been involved in this effort in a cooperative and consultative relation with several other institutions, which has demonstrated the value Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
217
217
of applying management science and technology to medical care. Acknowledgement must also be made of the guidance and orientation derived from the writings of Peter F. Drucker, especially his Management: Tasks, Responsibilities, Practices, in which he has devoted four chapters to performance in service institutions.15 We were involved in two studies of the ambulatory service of a nonaffiliated hospital. The first was made before the service was removed to new premises; the second was conducted six months after its removal. Another study in which we participated had to do with the ambulatory care service of a large voluntary hospital affiliated with a university medical center. We also participated in a study of a program which used a nursing clinic to monitor the care of chronically sick persons and ambulatory service. METHODS
Using a Work Sampling Data Sheet and a Patient Contact Record, the team collected work-sampling data (35,000 observations) and data on the flow of patients and on contact between patients and staff; 1,934 patients had been seen. These observations 1) Classified patients using the facility according to urgency of treatment sought, diagnosis, treatment, and disposition. 2) Ascertained length of wait for examination by doctor, laboratory tests, and x rays. 3) Measured utilization of time by professional staff, allied health staff, and clerical staff. 4) Created a substantial and reliable data base which includes the characteristics of the population of patients, which can be used for further analysis of functional relations in the services which are measured. Certain inferences were drawn readily from the data without exhausting their usefulness. Additional analyses are feasible but could best be done by computers. From the data bank some 23 basic exhibits and eight figures were developed which displayed a host of relations that will aid managerial decisions for improving the operation of the ambulatory-care service. The director of the serivce, Dr. Frank E. laquinta, commented: "Most of the things which the study and data defined were things which many of us in the service knew were problems. The study and the data gave us definitive proof, pointed the way toward solutions, and gained for us the support of the hospital administration in financing and developing these solutions." Vol. 53, No. 2, March 1977
218
218
R. H. FRIEDRICH AND OTHERS AND
OTHERS
The tabulated data covered such aspects as diagnosis, treatment and disposal, work-sampling, and flow of patients. The facts were presented in summary and by shift for both the emergency room and the adult walk-in clinic. The eight figures displayed such relations as flow of patients in the ambulatory care service, average number of patients by day and by shift, arrival of patients per hour, and patterns of disposal and referral in the adult walk-in clinic. CONCLUSIONS 1) The pattern of staffing for the three shifts in the ambulatory-care service were not related to the number of patients and the rate of their arrival. The heaviest load occurred on the "C" shift (4:00 P.M. to midnight); the heaviest staffing was assigned to the "B" shift (8:00 A.M. to 4:00 P.M.). 2) This relation was reflected in the numbers of patients who walked out without having received attention. The total walk-out rate for 24 hours in the emergency room was 8.2% of patients registered. When analyzed by shifts it was: "A" shift (midnight to 8:00 A.M.), 4.9%; "B" shift, 5.9%; "C" shift, 11.9%. This demonstrated a direct relation between understaffing and the walk-out rate. 3) The work-sampling data showed that the productive time of nurses was devoted to functions which were above the level of the classical nursing functions and that these classical functions were being performed by the nurse-assistant. 4) Patients spent 28.5% of their time with the staff and 61.5% of their time in waiting. The remaining 10% of the patient's time was used in discussion of instructions and discharge. This shows that there is room for more detailed analysis of functions in the effort to reduce this disparity. Since the patient controls the time of arrival, the loads at different times of the day will vary. However, the data show that, apart from seasonal effects, the volume of patients and the variations in the problems that they bring will be reasonably constant. Review of the data indicates that many other relations are available as a base for the making of decisions by the management. We believe that the preparation of the data bank to utilize computer assistance will permit the analysis of diagnoses in terms of 1) "through-put time," i.e., the analysis of the relation between the ordering of laboratory tests and the outcome of diagnosis and disposal and 2) the determination of which problems are best Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
219
treated in the emergency room and which in the adult walk-in clinic or in the schedule clinics. The measurements and analyses which were described were limited to the medical problems that occur in ambulatory care, however, a modicum of adaptation would make them applicable to group dental facilities. The management science and technology that has been described can stimulate the productive capacity that must evolve if adequate dental care is to be provided under a program of national health insurance. SUMMARY
These studies have shown the value of management science and technology as a basis for the improvement of managerial decisions in the production and distribution of medical care. They also demonstrate the advantages which arise from the integration of medical, dental, and managerial engineering knowledge and skill in developing the technology and its application to medical and dental care. Future-related studies should yield additional identification and quantification of critical relations. These should enable us to deploy available medical resources more effectively and to provide high-quality, cost-effective primary medical care to the American consumer. REFERENCES
1. Murray, R.J.: The use of technology in ambulatory health care. Bull. N.Y. Acad. Med. 48:955-65, 1972. 2. Fenderson, D.A.: A manpower evaluation protocol. Bull. N.Y. Acad. Med. 48:966-73, 1972. 3. Lowenthal, M: The Academy project on the functional analysis of allied health personnel in the medical care delivery team. Bull. N.Y. Acad. Med. 48:974-77, 1972. 4. Friedrich, R.H.: Ambulatory care: Organization and operation. Bull. N. Y. Acad. Med. 49:384, 1973. 5. Slaughter, F.G.: A functional model for improving the medical care system. Bull. N.Y. Acad. Med. 49:361-75, 1973. 6. Ross, S.A.: The clinical nurse practitioner in ambulatory care service. Bull. N.Y. Acad. Med. 49:393-402, 1973.
Vol. 53, No. 2, March 1977
7. Kelley, C. R.: The utilization of multiphasic screening in an ambulatory medical system. Bull. N. Y. Acad. Med. 49:406-14, 1973. 8. Taubenhaus, L.J.: The nonscheduled patient in the emergency department and walk-in clinic. Bull. N.Y. Acad. Med. 49:419-26, 1973. 9. laquinta, F. E.: Discussion of paper by L.J. Taubenhaus: The nonscheduled patient in the emergency department and walk-in clinic. Bull. N.Y. Acad. Med. 49:427-29, 1973. 10. Dalton, J., Friedrich, R. H., and Krishnamurti, V.: Findings and Inferences Resulting from a Study of the Emergency Room and Adult Walk-in Clinic at the Roosevelt Hospital, New York. Subcommittee on Functional Analysis of the Medical Care Process, Committee on Public Health, the New York Academy of Medicine, 1973.
220
R. H. FRIEDRICH AND OTHERS
11. Friedrich, R.H. and Nagin, D.: A Study of the Ambulatory Care Service at the Jamaica Hospital, New York. Study supported by a grant from the New York Metropolitan Regional Medical Program to the Committee on Public Health, the New York Academy of Medicine, 1972. 12. Friedrich, R.H. and Nagin, D.: Study of the Nurse Clinic at the Hospital for Joint Diseases, New York. Study support by a grant to the New York Metropolitan Regional Medical Program Committee on Public Health, the New York Academy of Medicine, 1972. 13. Dalton, J., Friedrich, R. H., and Krishnamurti, V.: Findings and Inferences Resulting from a Study of the Emergency Room and Scheduled Clinics at the Jamaica Hospital, New York. Subcommittee on Delivery of Medical Care, Committee on Public
Health, the New York Academy of Medicine, 1974. 14. Hughes, E.F.X., Lewit, E.M., and Rand, E. H.: Operative workloads in one hospital's general surgical residency program. N. Engl. J. Med. 289:660-66. 1973. 15. Drucker, P.F.: Management: Task, Responsibilities, Practices. New York, Harper & Row, 1973, pp. 130-66. 16. Friedrich, R.H.: The Nature and Scope of Dental Care (pp. 43-54); Friedrich, R.H., Poupard, J.M., and Rutledge, C.E.: New Concepts of Dental Practice to Improve Delivery Systems of Dental Care (pp. 55-76); Friedrich, R.H. and Robbins, G.F.: A Regional Plan for Rehabilitation of Oral, Facial and Speech Defects (pp. 77-97). In: Community Dentistry, Dummett, C., editor. Thomas, Springfield, Ill., 1974
Bull. N. Y. Acad. Med.
THE APPLICATION OF MANAGEMENT SCIENCE TO THE DELIVERY OF MEDICAL CARE IN MEDICAL AND DENTAL PRACTICES* RUDOLPH H. FRIEDRICH, D.D.S. Formerly Executive Secretary, Committee on Public Health The New York Academy of Medicine
JOHN DALTON, M.E., M.B.A. Manager, Management Advisory Service Staff Haskins and Sells
FRANK E. TAQUINTA, M.D.t Director, Ambulatory Care Service The Roosevelt Hospital New York, N.Y.
Oq NE of the most impressive images presented in television commercials is the advertisement for automobile tires which describes the most critical point of performance as "where the rubber meets the road." The viewer is given the feeling of the many factors, such as pressure, friction, heat, and wear, which affect the performance of the tires. The manufacturer uses this message to call attention to the programs of research and testing which support the contention that his tires assure your safety. Similarly, we suggest that practicing physicians and dentists, along with members of allied professions and ancillary professional persons, should concern themselves with the measurement and analysis of the conditions under which their patients meet the process of medical care, in order to identify the factors that affect the patient's perception of the system by which medical care is delivered. It has been demonstrated that such analyses-developed through the combined efforts of those who operate the process of medical care and of skilled management engineers oriented to that process-can produce data which will lead to the effective func*Presented at the annual meeting of the American Association for the Advancement of Science held at the Americana Hotel, New York, N.Y., January 28, 1975.
tNow Chief of Medicine, New Rochelle Medical Center, New Rochelle, N.Y. Address for reprint requests: Rudolph H. Friedrich, D.D.S., 1612 Marion Avenue, Emerald Point, Punta Gorda, Fla. 33950
Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
209
tional organization of facilities and staffing patterns that are used. The application of sound principles of management and technology to medical care organizations can assure continuing adaptation of the delivery system to the requirements of the increasingly knowledgeable consumer, and to the demands of governmental agencies and other third-party payers who insist on cost-effective care. Proven techniques of management science offer a sound alternative way of meeting the complex pressures that face the health professions. These pressures are often identified by such cliches as "a single standard of care," "cost containment," "quality of care," "health-manpower crises," and a host of other phrases which have kept the professions continuously in a defensive posture, while nonprofessional and nonpracticing professional persons rationalize a maze of economic, political, regulatory, and manpower solutions for the existing problems. The word "management" arouses fear in the majority of health professionals. Apparently they view management science as a discipline lodged in nonprofessional hands which will ultimately eliminate the responsibility and authority of the health-care professionals for making decisions in diagnosis and treatment. The concept of group practice arouses the fear also of an imposed external discipline in which the individual participating physician has no access to policy. Further, the concept of group practice that is publicized in the literature emphasizes forms of group practice in which medical professionals are hired employees rather than full partners. There are several organizational designs of group practice that have demonstrated their attractiveness to providers, patients, and fiscal agencies. None of these are universally applicable, nor will one model of group practice ever be adaptable to every situation. Certain principles of management have been identified as applicable to medical care and certain techniques have been developed for measuring and analyzing medical care. These techniques, which are essentially means of quantitating the process of medical care, require refinement and application to several separate components of the process. These techniques differ in form from techniques used in biological research but exhibit a degree of resemblance. The following comparison demonstrates the similarities.
Components of Medical Care 1) History-taking to define problem 2) Examination; accumulation of data Vol. 53, No. 2, March 1977
210
R.H. FRIEDRICH AND OTHERS
210R..REDCHADOHS
3) 4) 5) 6)
Establishment of diagnosis Development of treatment plan Monitoring of treatment plan to point of control Discharge or follow-up Components of the Management Process
1) 2) data 3) 4)
Establishment of problem with client Measurement of the components of problem and accumulation of
Analysis of data and formation of conclusions Formulation of recommendations for solutions 5) Implementation of recommendations and evaluation of results Where imaginative physicians and dentists understand the technology of management and work in concert with management personnel who are oriented to the process of medical care, the development and operation of group practices can be accomplished to the mutual benefit of all concerned. The concept of group practice and of management systems should be recognized as valuable to the health professions and to the patients they serve. GROUP PRACTICE
"Group ambulatory medical [and dental] practice is the physical grouping and integration of all of the professional, management, and fiscal functions of ambulatory medical [and dental] care in the common and individual interests of the patients, the professional, support professional, technical, and management personnel in the practice."4 The primary contribution of the group concept is the benefit which patient and doctor derive from a complete system of management. The cost of this system is shared by a number of doctors and their therapeutic teams. This permits highly trained professional persons to maximize their medical work by freeing them from the routine functions of business management which produce no medical care. MANAGEMENT
If we accept the definition of group practice that is given above, it is clear that we are dealing with an organized medical care institution which must function as an organ of society, fulfilling a need of the community or Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
211
of individual persons in the community. Management is an organ of the institution and has no substance apart from the institution. In order to make the institution function, management must: 1) Ascertain the purpose and mission of the institution 2) Arrange the productive organization of work (production engineering) and provide the leadership which makes the workers achieve (sound personnel management) 3) Identify and manage the social influence of the institution and meet its responsibilities to the patients and the community PURPOSE AND MISSION OF THE INSTITUTION
Medical and dental practices, however they are organized, are publicservice institutions which exist for a specific social function, namely, the provision of medical and dental care to the community. The determination of purposes must be based on an understanding of manpower, physical facilities, and fiscal resources, and on the most effective organization of these resources to maximize the provision of medical and dental care within the financial and educational limitations of the public. Financial and educational or cultural levels of the population determine the pattern of demand for medical and dental services and the rate of that demand during any 24-hour day. ORGANIZATION
OF
WORK
Methods are available for measurement and analysis of the demand pattern, as are methods for assessing the productivity of screeening programs in relation to costs and for determining the volume and kinds of problems that patients bring. With work-sampling it is possible to obtain accurate information on how various categories of professional, ancillary, technical, and administrative personnel spend their time in a given medical practice. The possibilities of measuring specific segments of medical care are limitless; they need only refinement and increased sophistication. The data developed from these measurements can provide basic guidance for the most effective arrangement of staffing and work in the process of medical care. This responsibility of management deals especially with the relations between professional persons, such as physicians, dentists, nurses, oral hygienists, variously designated technicians, and administrators. The more Vol. 53, No. 2, March 1977
212 212
OTHERS AND OTHERS R. H. FRIEDRICH AND FRIEDRICH
detailed the measurement of the process and the more accurate the analysis of functions, the more effective will be the allocation of responsibilities and functions to the lowest level of knowledge and skill consistent with an acceptable quality of performance. These data provide a base from which to determine the scope of the functions that are assigned to the new categories of health worker under the titles of clinical nurse practitioner, physician's assistant, and oral hygienist, and the conditions under which these persons will act. INFLUENCE OF THE INSTITUTION ON THE COMMUNITY
The reputation of an institution, its ability to serve the community's need for health services, and the way in which its staff reacts with individual patients are all of great importance to management. The influence of the institution on the economy of the community, as well as its effect on traffic patterns and parking problems, become concerns of the community. The kinds of patients that the institution attracts and their influence in the community can constitute problems. This is exemplified by the public reaction to the location of methadone facilities in some neighborhoods. These are all continuing problems of management. Techniques are available for surveying and analyzing the attitudes of individuals and communities, and these provide another area in which refinement and increasing sophistication offer challenges to the scientific method. GROUP PRACTICE
Many physicians and dentists have adapted the group principle to individual facets of their practices. Examples are the utilization of commonly owned premises for the conduct of individual practices, the grouping of special technical services (x ray, laboratory, clerical), and the grouping of certain categories of ancillary personnel, such as health educators and dental hygienists. None of the arrangements meet our working definition of group practice for ambulatory patients. As stated earlier, this is the physical grouping of all the professional, managerial, and fiscal functions of ambulatory medical or dental care in the interest of the patients and of all professional, ancillary, and administrative participants. Law and accountancy have a long and successful history of utilizing complete group organization in routine practice. Accountancy firms, for example, have Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
213
included managerial and consultative functions in their structures in order to serve clients fully. A wide variety of organized group-practice arrangements within our working definition functions in law and engineering. In medical and dental practice there are several models of complete group structure. In all too many instances the ambulatory care services of hospitals which developed from outpatient departments still demonstrate a lack of sound management in their operation. The professional staffing of these services is too often dependent on the assignment of members of house staffs, on the requirement that physicians who hold hospital-admitting privileges for their private patients protect these privileges by specified hours of work in the ambulatory care service, or on the use of hired physicians who serve part or full time in ambulatory care. Persons in none of these categories have any professional influence on the policies of the service. The medical care is predictably unsatisfactory. A second example consists of group practices owned and operated by fiscal intermediaries or by union welfare funds to which the professional personnel are attracted through a wide variety of contractual arrangements. These provide varying degrees of professional participation in operational
policies. A third example consists of professional corporations or partnerships of physicians or dentists operating in owned or rented facilitites; the partners or owners of the corporation have a voice in the operational policies under which the managerial function is conducted by senior partners and by employed managerial personnel. The organization and control of group practices varies according to the characteristics of the organizers and their motives in establishing and operating the institution. If we accept the working definition of medical and dental group practice as the means of producing and distributing medical and dental care, we should be able to extend the definition to include ambulatory care as an arrangement of practice designed to produce and distribute 1) preventive care, 2) first-echelon management of acute medical problems, 3) care of chronically sick persons, and 4) rehabilitation services-all with optimal continuity. In the group ambulatory-care practice the doctor must become an effective component of an organization of doctors and ancillary professional persons who provide the comprehensive medical and dental sevices Vol. 53, No. 2, March 1977
214
214
R. H. FRIEDRICH AND OTHERS R. H. FRIEDRICH AND
OTHERS~~~~~~~~~~~~~~~~~~~~~~~
that in the past were provided by the individual general practitioner at a lower level of effectiveness. Good management is a vital component of successful group operation. ESSENTIAL FUNCTIONS OF THE MANAGEMENT OF GROUP PRACTICE
The essential functions of group-practice management may be divided into 10 categories: 1) Functional analysis of the system and its components. These should comprise a continuous effort by management to maintain high effectiveness in the production of care; to decrease overhead expense to the lowest possible level consistent with high-quality care; to assure the convenience and comfort of patients; and to assure the discontinuance of obsolete practices. Analysis will produce the data essential for choice among alternatives in improving the effectiveness of the practice. Probably the most important information gained from this analysis is specification of the functions that can be delegated effectively to ancillary personnel. With the techniques of work-sampling, studies of the flow of patients, and records of contacts with patients it is possible to determine how much of the physician's time is devoted to activities inconsistent with his professional competence. Such studies identify activities that can be performed better by supportive personnel who are stimulated by the challenge of additional responsibility. Advantages gained by removing such functions from the physician include increased concentration on his basic duties in medical care, a more relaxed style of professional performance, and increased time for recreation. When the data obtained from an accurate analysis of his functions are presented to the physician, he becomes aware that his professional schedule can be made less complicated, less frustrating, and less exhausting. 2) Maintenance of professional and technical supportive services. The clinical nurse-practitioner, the physician's associate, and the oral hygienist provide analogous services in preparing data essential to the diagnosis and to formulating the plan of treatment. They also must be able to provide services which are essential in execution of the plan and in monitoring the progress of the patient. Technical services include the operation of 1) a multiphasic screening service which consists of the tests agreed upon by the medical group, 2) an x-ray and clinical photography laboratory, 3) a pharmacy, 4) special therapeutic services, and 5) a health-education service. The scope of these technical services, of course, will be determined Bull. N. Y. Acad. Med.
IMPLICATIONS OF NATIONAL HEALTH INSURANCE
215
by the size and finances of the practice. The remaining eight essential functions of management may be tabulated as follows: 3) Managing patients a) Reception for initial appointment and orientation b) Initial planning of the examination, diagnosis, and treatment; scheduling of treatment c) Coordination of appointments with the doctor's schedule d) Maintenance, follow-up, and health education 4) Maintaining professional records a) Individual records of health services rendered and continuing records of each patient's health status b) Records of performance of the discrete elements of the medical and dental team, follow-up on effectiveness of the treatment, and specification of treatments rendered c) Consolidation of data on the total health-service production of the practice by departments or teams 5) Maintaining financial records a) Individual records of charging, billing, credit, and collection b) Operation of an accounting system for the practice by departments, team income, and overhead c) Periodic cost-accounting and practice analysis by departments and teams, and development of policy amendments indicated by the analysis d) Financial statement of the partnership or corporation; annual reports 6) Communications a) Intraoffice: oral communications, memoranda, telephone calls, reports, and schedules b) Group conferences, policy manuals, and minutes c) External: business communications, professional communications, and public relations 7) Managing Personnel a) Acquisition of personnel, orientation, and training b) Establishment of clear personnel policies (duties, hours, remuneration, and other prequisites of employment which must be under periodic review); continuing educational programs, and Vol. 53, No. 2, March 1977
216
21
R. H. FRIEDRICH AND OTHERS .H
RERIHADOHR
criteria for advancement of responsibilities requiring additional skill and providing higher income; arbitration of personal conflicts; and maintenance of adequate facilities and services for personnel 8) Purchasing inventory and first-echelon maintenance of equipment 9) Maintenance a) Business office b) Staff and conference rooms c) Laundry, heating, ventilation 10) Fiscal operation of the practice a) Banking b) Investment of retained earnings and funding for pensions c) Personal security program of benefits for the entire staff d) Legal services e) Payroll Planning for the development and operation of systems of groups practice must be based on one primary principle: The system of group practice can deliver the most comprehensive, complete, high-quality, costeffective medical care by blending the professional knowledge and skill of doctors, nurses, physicians' assistants, oral hygienists, and technical operating personnel in an efficient, well-designed, and well-equipped common locus-provided remuneration is consistent with a high level of satisfaction and high-quality performance. It is vital that a group practice utilize the services of trained nonprofessional employees to assume the nonprofessional functions such as business activities. Group practice can take advantage of mechanized recordkeeping, e.g., with a minimum number of expensive clerks. Sophisticated techniques of accounting and analysis of practice can be applied more economically to group practice than to individual practice through the stronger financial structure resulting from economies of scale. The nonprofessional administrative functions of group practice can be managed by persons whose time is not as expensive as that of the medical, ancillary, and technical personnel. The Committee on Public Health of the New York Academy of Medicine has sponsored a series of studies of the delivery of medical care as well as specific studies of problems affecting the delivery of dental care. It has been involved in this effort in a cooperative and consultative relation with several other institutions, which has demonstrated the value Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
217
217
of applying management science and technology to medical care. Acknowledgement must also be made of the guidance and orientation derived from the writings of Peter F. Drucker, especially his Management: Tasks, Responsibilities, Practices, in which he has devoted four chapters to performance in service institutions.15 We were involved in two studies of the ambulatory service of a nonaffiliated hospital. The first was made before the service was removed to new premises; the second was conducted six months after its removal. Another study in which we participated had to do with the ambulatory care service of a large voluntary hospital affiliated with a university medical center. We also participated in a study of a program which used a nursing clinic to monitor the care of chronically sick persons and ambulatory service. METHODS
Using a Work Sampling Data Sheet and a Patient Contact Record, the team collected work-sampling data (35,000 observations) and data on the flow of patients and on contact between patients and staff; 1,934 patients had been seen. These observations 1) Classified patients using the facility according to urgency of treatment sought, diagnosis, treatment, and disposition. 2) Ascertained length of wait for examination by doctor, laboratory tests, and x rays. 3) Measured utilization of time by professional staff, allied health staff, and clerical staff. 4) Created a substantial and reliable data base which includes the characteristics of the population of patients, which can be used for further analysis of functional relations in the services which are measured. Certain inferences were drawn readily from the data without exhausting their usefulness. Additional analyses are feasible but could best be done by computers. From the data bank some 23 basic exhibits and eight figures were developed which displayed a host of relations that will aid managerial decisions for improving the operation of the ambulatory-care service. The director of the serivce, Dr. Frank E. laquinta, commented: "Most of the things which the study and data defined were things which many of us in the service knew were problems. The study and the data gave us definitive proof, pointed the way toward solutions, and gained for us the support of the hospital administration in financing and developing these solutions." Vol. 53, No. 2, March 1977
218
218
R. H. FRIEDRICH AND OTHERS AND
OTHERS
The tabulated data covered such aspects as diagnosis, treatment and disposal, work-sampling, and flow of patients. The facts were presented in summary and by shift for both the emergency room and the adult walk-in clinic. The eight figures displayed such relations as flow of patients in the ambulatory care service, average number of patients by day and by shift, arrival of patients per hour, and patterns of disposal and referral in the adult walk-in clinic. CONCLUSIONS 1) The pattern of staffing for the three shifts in the ambulatory-care service were not related to the number of patients and the rate of their arrival. The heaviest load occurred on the "C" shift (4:00 P.M. to midnight); the heaviest staffing was assigned to the "B" shift (8:00 A.M. to 4:00 P.M.). 2) This relation was reflected in the numbers of patients who walked out without having received attention. The total walk-out rate for 24 hours in the emergency room was 8.2% of patients registered. When analyzed by shifts it was: "A" shift (midnight to 8:00 A.M.), 4.9%; "B" shift, 5.9%; "C" shift, 11.9%. This demonstrated a direct relation between understaffing and the walk-out rate. 3) The work-sampling data showed that the productive time of nurses was devoted to functions which were above the level of the classical nursing functions and that these classical functions were being performed by the nurse-assistant. 4) Patients spent 28.5% of their time with the staff and 61.5% of their time in waiting. The remaining 10% of the patient's time was used in discussion of instructions and discharge. This shows that there is room for more detailed analysis of functions in the effort to reduce this disparity. Since the patient controls the time of arrival, the loads at different times of the day will vary. However, the data show that, apart from seasonal effects, the volume of patients and the variations in the problems that they bring will be reasonably constant. Review of the data indicates that many other relations are available as a base for the making of decisions by the management. We believe that the preparation of the data bank to utilize computer assistance will permit the analysis of diagnoses in terms of 1) "through-put time," i.e., the analysis of the relation between the ordering of laboratory tests and the outcome of diagnosis and disposal and 2) the determination of which problems are best Bull. N. Y. Acad. Med.
MANAGEMENT SCIENCE IN PRACTICE
219
treated in the emergency room and which in the adult walk-in clinic or in the schedule clinics. The measurements and analyses which were described were limited to the medical problems that occur in ambulatory care, however, a modicum of adaptation would make them applicable to group dental facilities. The management science and technology that has been described can stimulate the productive capacity that must evolve if adequate dental care is to be provided under a program of national health insurance. SUMMARY
These studies have shown the value of management science and technology as a basis for the improvement of managerial decisions in the production and distribution of medical care. They also demonstrate the advantages which arise from the integration of medical, dental, and managerial engineering knowledge and skill in developing the technology and its application to medical and dental care. Future-related studies should yield additional identification and quantification of critical relations. These should enable us to deploy available medical resources more effectively and to provide high-quality, cost-effective primary medical care to the American consumer. REFERENCES
1. Murray, R.J.: The use of technology in ambulatory health care. Bull. N.Y. Acad. Med. 48:955-65, 1972. 2. Fenderson, D.A.: A manpower evaluation protocol. Bull. N.Y. Acad. Med. 48:966-73, 1972. 3. Lowenthal, M: The Academy project on the functional analysis of allied health personnel in the medical care delivery team. Bull. N.Y. Acad. Med. 48:974-77, 1972. 4. Friedrich, R.H.: Ambulatory care: Organization and operation. Bull. N. Y. Acad. Med. 49:384, 1973. 5. Slaughter, F.G.: A functional model for improving the medical care system. Bull. N.Y. Acad. Med. 49:361-75, 1973. 6. Ross, S.A.: The clinical nurse practitioner in ambulatory care service. Bull. N.Y. Acad. Med. 49:393-402, 1973.
Vol. 53, No. 2, March 1977
7. Kelley, C. R.: The utilization of multiphasic screening in an ambulatory medical system. Bull. N. Y. Acad. Med. 49:406-14, 1973. 8. Taubenhaus, L.J.: The nonscheduled patient in the emergency department and walk-in clinic. Bull. N.Y. Acad. Med. 49:419-26, 1973. 9. laquinta, F. E.: Discussion of paper by L.J. Taubenhaus: The nonscheduled patient in the emergency department and walk-in clinic. Bull. N.Y. Acad. Med. 49:427-29, 1973. 10. Dalton, J., Friedrich, R. H., and Krishnamurti, V.: Findings and Inferences Resulting from a Study of the Emergency Room and Adult Walk-in Clinic at the Roosevelt Hospital, New York. Subcommittee on Functional Analysis of the Medical Care Process, Committee on Public Health, the New York Academy of Medicine, 1973.
220
R. H. FRIEDRICH AND OTHERS
11. Friedrich, R.H. and Nagin, D.: A Study of the Ambulatory Care Service at the Jamaica Hospital, New York. Study supported by a grant from the New York Metropolitan Regional Medical Program to the Committee on Public Health, the New York Academy of Medicine, 1972. 12. Friedrich, R.H. and Nagin, D.: Study of the Nurse Clinic at the Hospital for Joint Diseases, New York. Study support by a grant to the New York Metropolitan Regional Medical Program Committee on Public Health, the New York Academy of Medicine, 1972. 13. Dalton, J., Friedrich, R. H., and Krishnamurti, V.: Findings and Inferences Resulting from a Study of the Emergency Room and Scheduled Clinics at the Jamaica Hospital, New York. Subcommittee on Delivery of Medical Care, Committee on Public
Health, the New York Academy of Medicine, 1974. 14. Hughes, E.F.X., Lewit, E.M., and Rand, E. H.: Operative workloads in one hospital's general surgical residency program. N. Engl. J. Med. 289:660-66. 1973. 15. Drucker, P.F.: Management: Task, Responsibilities, Practices. New York, Harper & Row, 1973, pp. 130-66. 16. Friedrich, R.H.: The Nature and Scope of Dental Care (pp. 43-54); Friedrich, R.H., Poupard, J.M., and Rutledge, C.E.: New Concepts of Dental Practice to Improve Delivery Systems of Dental Care (pp. 55-76); Friedrich, R.H. and Robbins, G.F.: A Regional Plan for Rehabilitation of Oral, Facial and Speech Defects (pp. 77-97). In: Community Dentistry, Dummett, C., editor. Thomas, Springfield, Ill., 1974
Bull. N. Y. Acad. Med.
