Fundamentals of Medical Practice Management

by Stephen Wagner

Overview

Instructor Resources: Instructor Manual and test bank.
Consolidations and mergers have dramatically changed the face of the medical practice. From governance issues to information technology, today's practice managers face a host of new complexities and competing priorities that demand more robust skills and knowledge than ever before.

Fundamentals of Medical Practice Management uniquely addresses the educational needs of the modern practice manager. The author, who studied under quality guru W. Edwards Deming, combines a focus on quality and excellence with an important thesis: that working together and putting people first is the best path to success in healthcare.

The author argues that win–lose games and quick-fix solutions have begun to deliver diminished returns in healthcare—not only economically but emotionally and societally. Although the book delves into many practical topics, its aim is to shape the reader's mind-set for a new era of people-focused practice management.

Fundamentals of Medical Practice Management covers these areas and more:

• Information technology and management
• Regulatory issues, law, and practice management
• Strategic planning, project management, and marketing
• Third-party payers and revenue cycle
• Human resources management
• Quality and emergency management

This book will appeal to a wide range of learners, including those in organizational programs, undergraduate and master of health administration programs, and practice management certificate programs. Its insights will not only prepare those new to the field but also help current practice managers to retool and refocus.

Product Details

ISBN-13:	9781567939330
Publisher:	Health Administration Press
Publication date:	10/04/2017
Series:	Gateway to Healthcare Management
Sold by:	Barnes & Noble
Format:	eBook
Pages:	341
File size:	9 MB

About the Author

Stephen L. Wagner, PhD, FACHE, FACMPE, FACEM, FACHT, has been active in the field of healthcare as an executive, a teacher, and a researcher for more than four decades. He recently retired from a long career as a medical practice administrator, including many years as the senior administrator of the Sanger Clinic, where he was instrumental in the creation of the Sanger Heart and Vascular Institute. Dr. Wagner is now an executive in residence and assistant professor in the School of Health and Medical Sciences at Seton Hall University. In addition, his work as an expert on the US healthcare system and its transformation focuses on managing the difficult process of changing the healthcare organization to meet the challenges of the future. He earned his master’s degree in healthcare fiscal management from the Wisconsin School of Business at the University of Wisconsin–Madison and his doctorate in healthcare public policy analysis from the University of Louisville College of Business.

Read an Excerpt

CHAPTER 1

THE ORIGINS AND HISTORY OF MEDICINE AND MEDICAL PRACTICE

Not everything that counts can be counted, and not everything that can be counted counts.

— William Bruce Cameron

LEARNING OBJECTIVES

* Appreciate the history of medical practice.

* Explore the eight domains of medical practice management.

* Understand the forces of change affecting medical practice.

* Develop a perspective on the changes affecting medical practice.

* Understand the importance of the medical practitioner.

Introduction

Healthcare tends to be an accurate barometer of US society. Consider that virtually every aspect of social dysfunction, or of the human enterprise in general, becomes intertwined with the healthcare system. Most of the US population is born in a hospital, and many die there. The healthcare system is a place of joy and sorrow, hope and despair. The importance of the health system is hard to overstate, and the role that the medical providers play is a key factor in how the future system of care will take shape. This near-universal involvement with the healthcare system of virtually every person makes healthcare an accurate barometer of our society.

Often, the physician practice is the first line of care delivery, and for many patients, the physician provides the longitudinal care that sustains health and well-being (DiMatteo 1998). Therefore, the medical practice is a fundamental component of the healthcare delivery system, making the management and leadership of the medical practice a key to reforming that system. Because the physician practice is often the entry point for most patients into the healthcare system, in many ways it embodies the challenges of practice management, and the choices made to overcome these challenges may be endless and require achieving a careful balance of the art and the science of management.

This balance requires what W. Edwards Deming, the father of modern quality management, referred to as "profound knowledge," as well as the expertise to know when and how to use it (Deming Institute 2016). Deming's concept of profound knowledge is based in systems theory. It holds that every organization is composed of four main interrelated components, people, and processes, which depend on management to carefully orchestrate this interaction:

* Appreciation of a system

* Theory of knowledge

* Psychology of change

* Knowledge about variation

How do we keep up with the rapidly changing environment of healthcare in this new era? What metrics do we use, and what do we ignore? This journey demands that we answer these and more questions to bring about change in our healthcare system. It requires the full engagement of the provider community if meaningful and lasting change is to occur. Once change is effected, a new paradigm of care delivery will require a new mind-set that moves the industry from healthcare as the goal of the US healthcare system to well-being (Gawande 2014, 2016). Although health is critical to overall well-being, it is not the only issue. This text provides technical information on the management of the medical practice, but it also offers insight into necessary new skill sets providers and other healthcare leaders must have and roles they must play to create a paradigm of sustainable care for the future to optimize well-being as well as health.

Lifelong Learning

Practice management is changing rapidly in response to the ever-changing landscape of healthcare and the medical practice. Practice managers need to be committed to lifelong learning and be active in our professional organizations to ensure they are up-to-date on current knowledge.

The Medical Group Management Association (MGMA), with its academic arm, the American College of Medical Practice Executives (ACMPE), is the premier practice management education and networking group for practice managers. The organization dates back to 1926 and represents more than 33,000 administrators and executives in 18,000 healthcare organizations in which 385,000 physicians practice. MGMA (2016a) has been instrumental in advancing the knowledge of practice management, and ACMPE offers a rigorous certification program in practice management that is widely recognized in the industry.

ACMPE has identified eight areas that are essential for the practice manager to understand (exhibit 1.1).

This text examines each of these domains of the practice management body of knowledge to provide a sound, fundamental base for practice managers and practice leaders. It includes a comprehensive overview that does not assume a great deal of prior education in the field of practice management. Furthermore, it seeks to provide not only specific information about the management of the medical practice but also context in the larger US healthcare system. Too often, different segments of the healthcare system see themselves as operating in isolation. This point of view must change if medical practices are to transform and if managers are to lead successful practices in the future, whether a small, free-standing practice or a large practice integrated with a major healthcare system.

Another prominent organization for the education and advancement of practice management is the American College of Healthcare Executives (ACHE). ACHE is a professional organization of more than 40,000 US and international healthcare executives who lead healthcare systems, hospitals, and other healthcare organizations. Currently with 78 chapters, ACHE offers board certification in healthcare management as a Fellow of ACHE, a highly regarded designation for healthcare management professionals (ACHE 2016).

The American Healthcare System

The practice of medicine drives the US healthcare system and its components, and medicine is heavily influenced by the system as well. Medical practice and the healthcare system both are built on the foundation of the physician–patient relationship. Although the percentage of total healthcare costs attributed to physicians and other clinical practitioners was 20 percent in 2015, the so-called clinician's pen, representing the prescribing and referral power of medical practice clinicians, indirectly accounts for most healthcare system costs. Administrators do not prescribe medication, admit patients, or order tests and services. This fact is just one illustration of a fragmented system whose segments can act independently. This fragmentation must be addressed if medical practices are to provide high-quality healthcare to patients at the lowest cost possible.

To begin our study of practice management, the book first offers some perspective of medical practices in terms of the overall US healthcare system. A complete history of the practice of medicine is beyond the scope of this text, but the lengthy and enduring nature of medical practice is important to recognize. The first known mention of the practice of medicine is from the Old Kingdom of Ancient Egypt, dating back to about 2600 BC. Later, the first known code of conduct, the Code of Hammurabi, dealt with many aspects of human behavior and, most importantly for our study, established laws governing the practice of medicine. The first medical text was written about 250 years later (Nunn 2002).

Exhibit 1.2 provides a sample of some significant points in the development of the physician medical practice from ancient times to the present. The reader may wonder why such a diverse series of events is listed, ranging from the recognition of the first physician to the occurrence of natural disasters and terrorist acts. Medicine, whether directly or indirectly, influences virtually every aspect of human life. Events such as Hurricane Katrina, the 9/11 terrorist attacks, the emergence of the human immunodeficiency virus (HIV), and the Ebola virus outbreak have had major impacts on the healthcare system and physician practice. Before 9/11, medical practices thought little about emergency preparedness and management; such activities were seen as under the purview of government agencies. Until HIV was identified in 1983 as the cause of acquired immunodeficiency syndrome (AIDS), and reinforced by the Ebola crisis of 2014, medical practices spent few resources and little time thinking about deadly infectious disease and the potential for it to arrive from distant locales. A traveler can reach virtually any destination in the world within a 24-hour period, which is well within the incubation period of most infectious agents. Modern air travel has made the world of disease a single place, so practices must be mindful of patients' origins and travels.

The evolution of medical practices has coincided with and been driven in part by the development of medical technology and the scientific revolution. Medicine was limited in scope and primitive until the middle of the nineteenth century. Theories of disease were arcane, and diagnostic tools were largely absent (Rosenberg and Vogel 1979). Prior to 1850, medical education constituted an apprenticeship that was inconsistent and poorly preceptored, with no standard curriculum (Rothstein 1972). Procedures focused on expelling the disease with bleedings and emetics. Surgery was limited because of the lack of anesthesia, and as a result, being fast was better than being good. Patients often directed the physician as to the care they should receive. One might say early medical practice was the first iteration of patient-centered care (Burke 1985).

Practice Management Resources

Now, however, the amount of information available about medicine and medical practice management is virtually endless, representing many points of view; ideas; political world views; notions about funding and access; and the numerous disciplines in the broader management field, such as accounting, finance, human resources management, organization development, and logistics. With the vast expanse of knowledge available, students of healthcare and practice management are encouraged to develop lifelong learning skills. The field is changing so rapidly that the need for continuous updating of knowledge and skills is essential.

For example, practice managers need to build a virtual library of accurate and reliable sources. The list that follows comprises the foundation of that library, which should be referred to frequently (see the appendix to this text for each resource's website):

* Centers for Medicare & Medicaid Services (CMS)

* Advisory Board

* Dartmouth Atlas

* National Committee for Quality Assurance

* Institute for Healthcare Improvement

* Institute of Medicine

* Institute for Health Policy and Innovation

* Kaiser Family Foundation

* Robert Wood Johnson Foundation

* Annenberg Foundation

* Commonwealth Fund

* Centers for Disease Control and Prevention

* Agency for Healthcare Research and Quality

The Dimensions of Medical Practice

Medical practices can take many forms, ranging from small sole proprietorships to large multispecialty medical practices. Recent years have seen more medical practices embedded in large healthcare organizations, which also may be solo practices or large multispecialty entities (see exhibit 1.3).

A group practice is defined as a medical practice consisting of two or more practitioners working in a common management and administrative structure. Single-specialty groups are those that focus on one aspect of medicine, such as general surgery, family practice, orthopedics, cardiology, or internal medicine. Multispecialty medical groups contain more than one medical specialty in the organization. Multispecialty practices are highly integrated, with a common governance leadership and common management structure, and they have a highly developed corporate system for managing finances and dealing with regulatory agencies. Their operation and function are much more complex than those of solo or small practices.

Integrated delivery systems (IDSs) are networks of healthcare organizations under a single holding company or parent organization that contain multiple components of healthcare delivery. An IDS often includes hospitals, physicians and other clinicians, and payment organizations, often referred to as third-party payer organizations. The goal is to provide as complete a continuum of care as possible.

Types of Practitioners

Physicians have, of course, played a pivotal role in the US healthcare system since its inception. Physicians — and now, other nonphysician providers such as nurse practitioners (discussed later) — care for patients by

* assessing the patient's health status,

* diagnosing the patient's condition, and

* prescribing and performing treatment.

It has been said that the most expensive instrument in the healthcare industry is the provider's pen. An amusing statement, it also carries a lot of truth because all diagnostic and surgical procedures as well as office-based and hospital-based assessments — in fact, all care in general — is either performed or ordered by a provider.

Furthermore, the medical practice is unlike any other organization in the medical field because the nature and identity of the practice is closely linked to the individual providers in the practice. The providers are the primary producers and the primary governance body, and they are held accountable for the performance of the practice in a personal way. Their income is directly tied to the practice's performance, more closely than for other medical field workers. Exhibit 1.4 shows the fundamental components of a medical practice.

Often, the challenge in practice management is to serve the interests of the providers while maintaining a focus on the patient, with patient focus being the True North of the practice.

"True North" is a concept taken from Lean management that embodies the ideal state of a practice, its providers' vision of perfection, and the type and quality of practice it should strive to achieve every day. True North should transcend the individual and his or her personal goals or actions. Achieving personal objectives is not mutually exclusive but coincidental with True North.

Exhibit 1.5 shows the number of physicians practicing in the United States. This number can be further broken down into the number of practices by size and multispecialty versus single specialty, as shown in exhibit 1.6. Note the increasing size of practices over time, a trend that is expected to continue.

A primary care physician (PCP) is often the first contact for a patient with an undiagnosed health concern. In addition, PCPs frequently provide continuing care for many medical conditions that are not limited by cause, organ system, or diagnosis. This purview of practice differs from that of a medical specialist, who has completed advanced education and clinical training in a specific area of medicine and typically focuses on the diagnosis and treatment of one organ system of the body and its diseases.

Nurse practitioners and physician assistants are a growing segment of medical service provider, as seen in exhibit 1.7. A physician assistant (PA) is a nationally certified and state-licensed medical professional. PAs practice medicine with physicians and other providers and are allowed to prescribe medication in all 50 states, the District of Columbia, the majority of US territories, and the uniformed services. A nurse practitioner (NP) is a registered nurse qualified, through advanced training, to assume some of the duties and responsibilities of a physician.

PAs and NPs are sometimes referred to as advanced practice professionals or mid-level providers; however, the term mid-level provider is considered obsolete.

State laws vary as to the specific duties PAs and NPs are allowed to perform, so the practice manager must be fully informed on these regulations.

Advanced practice professionals are becoming increasingly important to medical practices because they can replace physicians in care delivery for many services, reserving the physician for more complex care requiring their expertise. For example, PAs and NPs often work as part of a care team with physicians. They may examine the patient first; collect facts and findings; and then, in collaboration with the physician, make a diagnosis and develop a treatment plan. The physician supervises the process and conducts his or her own examination of the patients to ensure that the proper care is delivered. The physician often checks critical elements of the exam and establishes a relationship with the patient. The PA or NP typically follows up with the patient once the treatment plan is established.

Practice Ownership

In addition to the area of medicine practiced, physician practices can be classified by type of ownership. Exhibit 1.8 shows the distribution of medical practices by ownership. Note the trend — also expected to continue — toward practice ownership by hospitals and healthcare systems.

Licensing Physicians

All 50 states require physicians and medical providers to hold a license. The licensing of medical providers is performed under the auspices of a medical examining board. These boards have the right to grant a license to practice medicine and the responsibility to investigate and discipline providers in cases of inappropriate conduct.

(Continues…)

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Table of Contents

Preface xv

Acknowledgments xix

Chapter 1 The Origins and History of Medicine and Medical Practice 1

Learning Objectives 1

Introduction 1

Lifelong Learning 3

The American Healthcare System 4

Practice Management Resources 7

The Dimensions of Medical Practice 8

Types of Practitioners 9

Practice Ownership 12

Licensing Physicians 12

Medical Training 13

What Is Changing? 14

What Are Some of Today's Challenges? 16

Leadership Challenges 27

The Cloud of Anxiety 31

Discussion Questions 32

References 32

Chapter 2 Practice Models and Legal Organization 39

Learning Objectives 39

Structures and Organization 39

Affiliation Versus Employment Models and the Corporate Practice of Medicine 46

Culture and Organization 50

Academic Medical Centers and Physician Practice Management 52

Accountable Care Organizations 53

Clinical Integration 54

Patient-Centered Medical Homes 55

Integrated Delivery Systems 58

Mergers and Acquisitions 60

The "Great Double Cross" 66

Discussion Questions 67

References 67

Chapter 3 Information Technology and Management 71

Learning Objectives 71

Introduction 71

Performance 72

Interface 73

Education and Training 73

Meaningful Use 74

Practice Management Systems 77

Other Important Systems in the Medical Practice 78

The Patient Flow Process and IT's Role 82

Interoperability 83

Value-Based Care and IT 84

Practical Aspects of Medical Practice Information Systems 85

Discussion Questions 96

References 96

Chapter 4 Regulatory Issues, the Law, and Practice Management 99

Learning Objectives 99

Introduction 99

Jurisdiction 101

Laws Regulating the Organization and Governance of Corporations 101

Corporate Organizational Documents 102

Contract Law 105

Federal and State Taxation 105

Antitrust Laws 106

Labor Laws 107

Federal Laws Governing Medicare Fraud and Abuse 108

Medical Records Regulations 113

Malpractice 114

The Medical Practices Act 115

Certificate-of-Need Laws 116

Risk Assessment 116

Discussion Questions 119

References 120

Chapter 5 Strategic Planning, Project Management, and Marketing in Practice Management 125

Learning Objectives 125

Introduction 125

Strategic Planning 126

Developing a Communication Plan 127

Strengths, Weaknesses, Opportunities, and Threats Analysis 128

Force Field Analysis 131

Economic Analysis of New or Improved Service 133

Analysis of a Capital Investment 134

Project Management 139

What Is Marketing? 142

Discussion Questions 149

References 149

Chapter 6 Third-Party Payers, the Revenue Cycle, and the Medical Practice 151

Learning Objectives 151

Introduction 151

Role and Scope of Financing Healthcare 152

Management Decisions 153

Insurance Concepts 154

Types of Health Coverage 157

An Illness System, Not a Health System 162

Managed Care 164

Government Health Insurance Programs 170

The Revenue Cycle 173

Resource-Based Relative Value Scale 178

Medicare Access and CHIP Reauthorization Act 180

Discussion Questions 183

References 184

Chapter 7 Financial Management and Managerial Accounting in the Physician Practice 187

Learning Objectives 187

Introduction 187

Cost Behavior 188

Accounting Methods 190

Budgeting 191

Financial Statements 196

Monitoring Financial Performance 201

Physician and Other Provider Compensation 205

The Future of Practice Financial Management 212

Discussion Questions 212

References 212

Chapter 8 Human Resources Management 215

Learning Objectives 215

Introduction 215

The People in the Practice 216

The Employment, Recruiting, and Hiring Process 216

Talent Management 223

Employment Policies and Procedures 229

Organization Development 230

Employee Development 230

Change Management 231

Conflict Management 239

Diversity and Inclusion 241

Reward and Recognition 242

The Future Workforce 243

Burnout 243

Discussion Questions 247

References 247

Chapter 9 Leading, Managing, and Governing Within Organizational Dynamics 251

Learning Objectives 251

Introduction 251

The Basics and Theories of Leadership 252

Leadership Versus Management 255

The Dyad Leadership Model in Practice Management 256

Leadership: Mission, Vision, and Values 260

Professionalism 262

Leadership Styles 265

Organizational Conscientiousness 266

Emotional Intelligence 266

Generational Issues in the Medical Practice 268

Diversity and Inclusion Issues for Leadership 269

Giving and Receiving Feedback 271

Governance and Organizational Dynamics 274

Conducting Meetings 277

Assessing Leadership Success 279

Discussion Questions 280

References 280

Additional Reading 283

Chapter 10 Quality Management in the Physician Practice 285

Learning Objectives 285

Introduction 285

Quality and Safety Improvement 286

The Triple Aim 288

Quality Improvement Processes 290

Quality Improvement Tools 301

Data Analytics 305

Discussion Questions 306

References 306

Chapter 11 Emergency Management and the Medical Practice 309

Learning Objectives 309

Introduction 309

The New Nature of Emergencies 310

The Key Dilemma 313

Emergency Management 314

Developing an Emergency Preparedness Plan for the Practice 315

Who Is an Emergency Manager? 319

Community Emergency Response Teams 322

Special Situations 322

Collaborative Emergency Management 328

Discussion Questions 329

References 329

Chapter 12 The Future and Medical Practice Innovation 333

Learning Objectives 333

Introduction 333

Forces of Change 337

The Lesson of the Affordable Care Act 340

The Promise of Community-Based Primary Care 340

Future Workforce Challenges 341

Global Threats and International Cooperation 342

Advances in Imaging and Laboratory Testing 343

Evidence-Based Healthcare 344

Data Analytics and Artificial Intelligence 345

Population Health 346

Chronic Disease 350

Underserved Areas and Community Health Centers 352

Genomics and Precision Medicine 353

The Internet and Self-Efficacy 356

Patients' Interactions with Healthcare Providers 359

Nontraditional Providers 360

Site-Based Corporate Medical Services 361

Concierge Practices 362

Wearables and Internet-Based Medical Services 363

Social Media 364

Alternative and Complementary Medicine 365

Behavioral Economics and Changing Patient Behavior 365

Discussion Questions 368

References 369

Appendix 377

Glossary 381

Index 385

About the Author 411