Wednesday, May 06, 2015

Second Order Generic Management: Lobbyist Named CEO of American Hospital Association

A long time ago, in a universe far, far away, hospitals had relatively small administrations, usually lead by a older physician or nurse who served as executive director or superintendent.  Leading a hospital was seen as a calling, not a means to become rich.  With the rise of generic management, hospital management grew, and became dominated by generic managers who were trained as managers, not as health care professionals.

So if hospitals are now usually lead by generic managers, it should be no surprise that hospital organizations are lead by generic managers.  So it should be no surprise that the current CEO of the American Hospital Association, Richard J. Umbdenstock, was formerly " executive vice president of Providence Health & Services and president and chief executive officer of the former Providence Services, Spokane, Washington." (Look here.)

What should be a surprise, however, is what was just reported in Modern Healthcare,

The American Hospital Association has chosen Richard Pollack, its longtime lead lobbyist, to succeed Richard Umbdenstock as CEO. Hospital leaders say Pollack is the right pick, even though he never led a hospital or health system.

Pollack, 59, has been with the AHA for more than three decades and has served as the group's executive vice president for advocacy and public policy since 1991. He will take over the top post in September, the AHA announced Monday during its annual meeting in Washington.

Pollack has developed a sterling reputation for pressing the hospital group's agenda on Capitol Hill and beyond. He's played an integral role in top healthcare policy discussions in recent years, including passage of the Affordable Care Act.

Chip Kahn, president of the Federation of American Hospitals, which represents investor-owned hospitals, called Pollack a 'wise Washington hand.'

In addition,

John Rother, president of the nonpartisan National Coalition on Health Care, noted that it's an unusual pick in the sense that Pollack has not overseen a major hospital system. Before joining the AHA, Pollack served as a lobbyist for the American Nurses Association. The Brooklyn native started his professional career in 1977 as a legislative assistant for Rep. David Obey (D-Wis.)

So, the incoming American Hospital Association CEO is not a doctor or a nurse.  He has not had any known direct experience in patient care.  He has no training or experience in public health or biomedical sciences.  Furthermore, he has no direct experience working, even just as a manager, in a hospital or any organization that provides patient care or for the public health.

His entire experience is in Washington, DC, first as a legislative staffer, and then - not to put too fine a point on it - as a lobbyist.

This would make sense if he were going to lead a lobbying firm.  However, the AHA says:

In summer 1995, after regional policy board (RPB) review, the Board of Trustees approved vision and mission statements:

Vision: The AHA vision is of a society of healthy communities, where all individuals reach their highest potential for health.

Mission: To advance the health of individuals and communities. The AHA leads, represents and serves hospitals, health systems and other related organizations that are accountable to the community and committed to health improvement.

So now we have hospitals largely run by generic managers.  Furthermore, hospital associations, whose members are largely represented by generic managers, now may be run by lobbyists, people even more removed from actual health care.  Hence, perhaps too archly, I suggest that Mr Pollack is the first known example of a second order generic manager.


 In 1988, Alain Enthoven advocated in Theory and Practice of Managed Competition in Health Care Finance, a book published in the Netherlands, that to decrease health care costs it would be necessary to break up the "physicians' guild" and replace leadership by clinicians with leadership by managers (see 2006 post here). Thus from 1983 to 2000, the number of managers working in the US health care system grew 726%, while the number of physicians grew 39%, so the manager/physician ratio went from roughly one to six to one to one (see 2005 post here). As we noted here, the growth continued, so there are now 10 managers for every US physician.

The managers who first took over health care may have had some health care background.  Now it seems that health care managers are decreasingly likely to have any health care background, and increasingly likely to be from the world of finance.  Meanwhile, for a long time, business schools seem to have been teaching managers that they have a God given right to manage every organization and every aspect of society, regardless how little they know about what the particular context, business, calling, etc involves.  Presumably this is based on a faith or ideology that modern management tools are universally applicable and nigh onto supernatural in their powers.  Of course, there is not much evidence to support this, especially in health care.

We have discussed other examples of bizarre proclamations by generic managers and their supporters that seem to corroborate their belief in such divine powers.  Most recently, there was the multimillionaire hospital system CEO who proclaimed new artificial intelligence technology could replace doctors in short order (look here).   Top hospital managers are regularly lauded as "brilliant," or "extraordinary," often in terms of their managerial skills (look here), but at times because of their supposed ownership of all aspects of patient care, e.g., (look here)

They literally are on call 24/7, 365 days a year and they are running an institution where lives are at stake....

As noted above, if the new generic managers work in offices that are physically, intellectually and spiritually distant from the real world of health care, a lobbyist running a hospital association would be at best distant even from the management suite.

It is way past time for health care professionals to take back health care from generic managers.  True health care reform would restore leadership by people who understand the health care context, uphold health professionals' values, are willing to be held accountable, and put patients' and the public's health ahead of self-interest.


afraid said...

Could it be that the takeover by generic managers came after the takeover of healthcare by insurers including medicare and the state medicaids?

Roy M. Poses MD said...


The push for generic managers to take over health care probably dates due the 1980s, or earlier. I believe Enthoven was pushing this as a solution to rising costs even before he published his book in Europe.

I believe the push for generic management in general is older. Remember Robert McNamara, the whiz kid who took over Ford, but didn't understand why the Thunderbird should be a 2-seater rather than a big 4-door sedan? And he was such a whiz kid that President Kennedy appointed him Defense Secretary, in which job he was known for promoting body counts as a metric of success in the Viet Nam War? And Enthoven was then one of the proteges who worked on the concept of body counts.

Generic managers, and their supposedly brilliant management tools, like relying on metrics that can be easily measured regardless of their meaning or importance, have been around for too long.

Afraid said...

As I recall, the 1980s was the birth of the HMOs, then a reaction to ever higher priced healthcare insurance/costs.

Don't I wish health insurance only cost what it did in the 1980's. I bought my own then, for a family of 4 a two hundred a month for excellent coverage. Now it's far more than a thousand a month for high deductible essentially catastrophic coverage.

The coverage value per dollar went down a lot under Obama care for me. To keep the same $$ value, the insurance is almost useless due to the high deductible. We choose no care at no cost, the money must be piling up at the insurers' accounts. And oh my, the robo calls from "Obama Care Hotline" are incessant and full of misinformation.

I'm not blaming the democrats, they mean well maybe, or perhaps some of them do, well maybe at least they say they care more.

I can't wait for Medicare age to get here .... or maybe not.

It's all very confusing and more than a little disappointing to see how we common citizens are being thrown under the bus. Not just in healthcare, but healthcare is a prime example.

Roy M. Poses MD said...


Non-profit HMOs had been around since the original Kaiser program.

The birth of the for-profit HMO I believe began in the Nixon administration (Republican).

For-profit HMOs have been embraced by both Republicans and Democrats.

The basic outline of "Obamacare" was cribbed from ideas proposed by Newt Gingrich (Republican) and the Heritage Foundation among others. "Obamacare" is very similar to "Romneycare" in Massachusetts. Romney, of course, was a Republican.

If you want to fault the Democrats for falling for the bad Republican idea of basing health insurance on commercial managed care, that's fine. I agree with that.

But the current US mess of for-profit managed care/ health insurance was a thoroughly bipartisan blunder (or example of crony capitalism).

And problems with generic management/ the takeover of health care by managers/ administrators/ bureaucrats/ executives is an even bigger problem.