Addressing threats to health care's core values, especially those stemming from concentration and abuse of power - and now larger threats to the democracy needed to advance health and welfare. Advocating for accountability, integrity, transparency, honesty and ethics in leadership and governance of health care.
The introductory chapter starts with the TMAP/ Risperdal/ Johnson and Johnson case. We first posted on this case in 2006 here. Briefly, as revealed by whistleblower Allen Jones, Johnson and Johnson subsidiary Janssen was accused of conducting a campaign of deception, which we labeled a systematic stealth marketing campaign, to push use of the anti-psychotic drug Risperdal (risperidone).
Crisis of Conscience includes a substantial amount of material on whistleblowing in health care, drawn from interview with many in the field, including Steven Aftergood, Elliot Aronson, Elin
Baklid-Kunz, Alison Bass, Max Bazerman, Sara Miron Bloom, Donna Boehm, Lori Brown, Diane Burton, Richard Condit, Daniel Fessler, Skip Freedman, Adrian Furnham, Susan Gouinlock, Mark Greenberg, Eric Havian, Jim Helmer, Marianne Jennings, Erika Kelton, Don Kettl, Brian Knutson, Steve Kohn, Sheldon Krimsky, Jeanne Lenzer, Harry Lewis, Harry Litman, Iain McGilchrist, Cheryl Eckard Mead, Tom Melsheimer, Russell Mokhiber, Mickey Nardo, Cliff Palefsky, Robert Prentice, Jim Ratley, Lesley Ann Skillen, Lynn Stout, Skyler Swisher, Paul Thacker, Janine Wedel, Marlan Wilbanks, Scott Withrow and Lin Wood. It also includes material supplied by yours truly.
I am taking this opportunity to provide brief excerpts showing the very earliest beginning of my realizations that health care professionals were losing control of medicine, and health care.
The Early Days of Managerialism
1978, during my internship, from the haze of sleep deprivation, remembered with emotion
In October 1978, Dr. Roy Poses, an intern at the University Hospital in Boston’s South End, the teaching hospital of Boston University, had just completed the first twenty-five hours of another brutal, sleepless shift. 'People were horrendously overworked,' Poses remembers. 'You walked in at seven a.m. and worked to seven p.m. the next day, with about two hours of sleep— no night floats, no day floats, no hours restrictions.' Waiting for an elevator, eyes glazed and head bowed with fatigue, he wondered how he’d get through the day. When the elevator finally arrived, he stepped on, and found himself surrounded by men and women whose perfumes and colognes contrasted with the alcohol and disinfectant of the ward he’d just left, much as their tailored business suits contrasted with his body fluid–flecked, sweat-soaked scrubs. Conversation ceased. The well-groomed visitors were all watching him.
'It took me a while to figure out who they were,' Poses remembers. 'They
certainly weren’t doctors or patients. They were too well-dressed to be
vendors. I thought they might be bankers.' Eventually he understood:
these were the hospital’s financial executives, just arriving for their
day’s work in the management suite on the top floor. 'I felt like
rubbing up against them and saying, ‘Go ahead, folks, take a whiff! I’m
the guy you’re paying minimum wage to keep this f***in’ place running.’
Sorry, but to this day, it inspires anger. As Mueller later noted
This was Poses’s first encounter with managerialism, which has seen financial managers take control of major hospital chains and other healthcare providers. He initially believed that the problem was limited to Boston University. 'I just assumed that the chief of medicine and the chief of surgery ran most hospitals, and that the business people worked for them, to keep the finances straight.' In fact, at that point CEOs, CFOs and COOs were a rarity at hospitals. 'There might have been an ‘executive director’ or a ‘hospital superintendent,’' Poses remembers, 'but he was a retired doctor, and his office wasn’t too grand. There were ‘hospital administrators,’ but you’d only contact them if the lights went out or there were no linens on the beds.' However, as he moved to other posts at university medical centers in Pennsylvania, New Jersey and Virginia, before ending up at Brown University medical school in 1994, he found the same widening gulf between the values of medicine and the methods of hospital leaders, most of whom were skilled in capital rather than health.
Recap: Managerialism
Since we started Health Care Renewal, we have discussed the rise of generic managers, which later we realized has been called managerialism, quite a bit. Managerialism
is the belief that trained managers are better leaders of health care,
and every other sort of organization, than are than people familiar with
the particulars of the organizations' work. Managerialism has become
an ascendant value in health care over the last 30 years. The majority
of hospital CEOs are now management trained, but lacking in experience
and training inmedicine, direct health care, biomedical science, or
public health. And managerialism is now ascendant in the US
government. Our president, and many of his top-level appointees, are
former business managers without political experience or government
experience.
We noted
an important article in the June, 2015 issue of the Medical
Journal of Australia(1) that made these points:
- businesses of all types are now largely run by generic managers,
trained in management but not necessarily knowledgeable about the
details of the particular firm's business
- this change was motivated by neoliberalism (also known as economism or market fundamentalism)
- managerialism now affects all kinds of organizations, including health care, educational and scientific organizations
- managerialism makes short-term revenue the first priority of all organizations
- managerialism undermines the health care mission and the values of health care professionals
Generic or managerialist managers by definition do not know much about health care, or about biomedical science, medicine, or public health. They are prototypical ill-informed leadership, and hence may blunder into actual incompetence. They are trained that they have a right to lead any sort of organization, which breeds arrogance. These managers are not taught about the values of health care professionals. Worse, they are taught in their business style training about the shareholder value dogma, which states that the main objective of any organization is to increase revenue. Thus, they often end up hostile to the fundamental mission of health care, to put care of the patient and the health of the population ahead of all other concerns, which we have called mission-hostile management. Finally, arrogance and worship of revenue allows self-interested and conflicted, and even sometimes corrupt leadership.
Managerialists may be convinced that they are working for the greater
good. However, I am convinced that our health care system would be a
lot less dysfunctional if it were led by people who actually know
something about biomedical science, health care, and public health, and
who understand and uphold the values of health care and public health
professionals - even if that would cost a lot of very well paid
managerialists their jobs.
Reference
1. Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM. The scourge of
managerialism and the Royal Australasian College of Physicians. Med J
Aust 2015; 202: 519- 521. Link here.
Managerialism, in my humble opinion, is one of the major reasons why the US health care system is so dysfunctional. We have long discussed how people whom we first called "generic managers" have taken over health care. Increasingly, health care organizations, including hospitals, pharmaceutical companies, health insurance companies, government agencies, etc are now led by people with management training, but not necessarily with any training or background in medicine, biomedical research, epidemiology, public health, or health care policy. We began noting how such generic managers often prioritize short-term revenue over all other concerns, presumably based on the shareholder value dogma taught in business schools (look here). Worse, generic managers may be ignorant of, misunderstand, or be frankly hostile to the core values of health care professionals. (See our posts on mission-hostile management.)
More recently, we found that our observations could be better described as aspects of "managerialism." We noted an important article that in the June, 2015 issue of the Medical Journal of Australia(1) that made these points about managerialism:
- businesses of all types are now largely run by generic managers, trained in management but not necessarily knowledgeable about the details of the particular firm's business
- this change was motivated by neoliberalism (also known as economism or market fundamentalism)
- managerialism now affects all kinds of organizations, including health care, educational and scientific organizations
- managerialism makes short-term revenue the first priority of all organizations
- managerialism undermines the health care mission and the values of health care professionals
Many health care professionals mutter under their breath about the behaviors of their managerialist leaders, but there has been little open discussion of managerialism, and no organized movement against it.
Last week, I found an excellent example of how managerialism has become the norm in health care.
A UPS Executive Becomes a Hospital Executive
An article in the Buffalo News on May 26 recounted how one Mr Martin Boryzak ascended to the the position of CEO of Sisters Hospital and its St Joseph Campus.
He Ascended to Hospital Management without Any Medical or Health Care Background
Per the Buffalo News,
The Buffalo native was working for the package delivery company in Philadelphia in 2009 when Catholic Health recruited him after his mother, a nurse in the hospital system, slipped his resume to management unbeknownst to Boryszak.
He joined 290-bed Sisters that year as director of finance and was also named vice president of operations at 123-bed St. Joseph Campus in 2012. In 2014, he rose to chief operating officer at Sisters.
He Believes He Has No Need for Health Care Background, Because It is All About the Revenue
Per the Buffalo News, first
Martin Boryszak, the new president and chief executive officer of Sisters Hospital and its St. Joseph Campus in Cheektowaga, came to health care from what seems like an unusual route – UPS.
The differences in the businesses are not as great as you might think. As Boryszak sees it, they both adhere to basic business principles.
Q: Does it matter whether you have an academic background in health care?
A: It depends on the person. The most complicated piece of health care is the revenue. And, in that respect, it's not unlike any other service industry. The best way to maneuver through that is not that unique. When half your revenue comes from the government and the other half is influenced by what the government does, it's a difficult thing to navigate. Once you figure that piece out all other business principles are applicable.
Also,
Q: What keeps a hospital CEO up at night?
A: Where is your revenue coming from....
According to Mr Boryszak, hospitals are just another business. Keep the money coming in, and everything will be fine.
What About the Hospital Mission, the Care of Patients, the Values of Health Care Professionals?
The closest Mr Boryszak got to any of these issues was in his reflections, if that is the word, about his career at UPS.
I liked what I did, but wanted a balance with some type of calling. I wanted to feel that I was making a difference. It wasn't a function of UPS because it has great people and is a great company. I enjoyed every minute there but felt as though there was something more. I was recruited and never really thought about health care, but what better industry to drive change.
He said not a word about what hospitals actually do. He could not even define the "sort of calling," the sort of "difference" he might make, the kind of change that should be driven.
Summary
There you have it in a nutshell. Here is an MBA running a hospital that feels not the slightest need for training or experience in medicine, biomedical research, epidemiology, public health, or health policy. He wanted to do something involving a "calling," and would "drive change," but expressed precisely nothing about the nature of the calling in the hospital setting, or the sort of change to be driven. He thinks the most complicated issue in health care is "revenue." Presumably he feels revenue is more complicated than determining a difficult diagnosis, managing an acutely ill patient, counseling a patient with chronic illness, or consoling a patient who is dying, if he even understands that those are some of the things that go on in a hospital. Furthermore, he seems to feel entirely comfortable issuing orders to health care professionals who need to take on such tasks, and more.
Thus has managerialism been normalized, or maybe I should say thus has deviancy been defined down.
As an aside, the reporter interviewing Mr Boryszak also seemed entirely comfortable with the notion of an MBA without health care experience or training, and apparently without understanding of health care professionals' values running hospitals, and entirely comfortable with the notion that the most complicated thing about health care is generating revenue. The reporter never even slightly challenged any of this.
Thus has managerialism been normalized.
So as we have said endlessly,...
We need far more light shined on who runs the health care system, using what practices, to what ends, for the benefits of whom.
True health care reform would enable transparent, honest, accountable
governance and leadership that puts patients' and the public's health
over ideology, self-interest, and self-enrichment.
Can that happen in a world in which the business CEO is viewed as the highest form of life?
Reference
1. Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM. The scourge of
managerialism and the Royal Australasian College of Physicians. Med J
Aust 2015; 202: 519- 521. Link here.
Once, a long time ago, in a galaxy far away, doctors and hospitals did no marketing, and pharmaceutical marketing was restricted to health care professional audiences. Now, in the US, we have often seen the negative effects of exuberant marketing, often deceptive, on the health care system.
A Marketer Pushes More Marketing Influence on Hospital Management
Yet, in a post in the Marketing Insider section of MediaPost, a writer lamented that marketing does not have enough influence within hospitals.
About 10% of hospital budgets are designated for marketing. It’s been that way for years, with stagnant year-on-year growth.
That is in contrast to ... Amazon, of course:
Amazon reported record profits in 2018, earning $10.1 billion in net income compared with just $3 billion the prior year. Amazon ranked as the nation's fourth-largest advertiser in 2017, spending an estimated $3.4 billion in U.S. advertising and promotions.
It goes beyond Amazon, though:
Amazon is not the only company appropriately valuing marketing. Many modern consumer-focused enterprises are moving from seeking maximum ROI to actually transforming the marketing value chain.
IMHO, this shows how managers who run, or at least pontificate about running hospitals do not seem to have an idea what hospitals actually do. How does a hospital, the locus for providing care to sick and injured people, care provided by highly trained health care professionals sworn to put patients' values ahead of all other concerns, compare to a web-based retailer, or to most "consumer-focused enterprises?"
Furthermore, the post pushes the value of marketing beyond just raising awareness of or promoting a product,
Part of the reason hospital systems are starting to spend more on marketing is that the function is broadening. Marketing teams are being asked to take on more strategic tasks, from managing the hospital’s brand and reputation to operationalizing patient engagement.
Traditionally, patient experience falls under the purview of quality or safety. But in the last decade, health systems have seen the marketing department’s impact on the patent experience, even going so far as to have marketing report to the chief patient experience officer.
One might think that the typical patient who comes to a hospital wants to experience an improvement in their condition, their symptoms, their function, reduction of their pain, or sometimes the remission or even cure of their problem. I do not see how any rational person seeking a fun experience would choose to go to a hospital. What marketing has to do with health care quality or safety completely escapes me.
The Rationale: a Misinterpretation of the Social Determinants of Health
The rationalization for involving marketers in patients' experiences was:
Leaders are seeing that the care they provide accounts for just 20% of patients’ optimal outcomes. The rest is attributable to factors like social determinants of health. Today, if hospital systems want to keep patients healthy, they have to influence experiences patients have outside the hospital walls.
The notion that marketing by a hospital would be an optimal way to positively influence social determinants of health is bizarre, to use a polite term. To quote an article entitled "Beyond Health Care: The Role of Social Determinants in Promoting Health and Health Equity" published by the Kaiser Family Foundation,
Social determinants of health include factors like socioeconomic status, education, neighborhood and physical environment, employment, and social support networks, as well as access to health care. Addressing social determinants of health is important for improving health and reducing longstanding disparities in health and health care.
What could hospital marketing do to affect such factors? Instead, the writer explained:
Hospitals and health systems are moving beyond simple outreach and using the principles of marketing — such as segmentation, personalization and meeting consumers where they are — to engage patients in changing behavior and getting them invested in their own well-being.
Health systems must ensure that every time a patient interacts with their brand, that interaction keeps patients engaged and satisfied and delivers on the fundamental promise that they make to their patients: making and keeping them well.
Again, what has that to do with socioeconomic status, education, neighborhood and physical environment, employment, and social support networks? Rather than talking about social factors, the writer appears to be talking about some efforts to change individual patients' behavior.
However, the KFF article made a clear distinction between social determinants of health and individual health behaviors, while asserting that social determinants of health may influence individual behaviors, but not necessarily the other way around:
While there is currently no consensus in the research on the magnitude of the relative contributions of each of these factors to health, studies suggest that health behaviors, such as smoking, diet, and exercise, and social and economic factors are the primary drivers of health outcomes, and social and economic factors can shape individuals’ health behaviors. For example, children born to parents who have not completed high school are more likely to live in an environment that poses barriers to health such as lack of safety, exposed garbage, and substandard housing. They also are less likely to have access to sidewalks, parks or playgrounds, recreation centers, or a library.4 Further, evidence shows that stress negatively affects health across the lifespan5 and that environmental factors may have multi-generational impacts.
Thus, to argue that hospital marketing could influence individual patient behaviors and thus positively affect social determinants of health makes no sense.
Summary: Managerialism, Again
I applaud the writer's implication that
hospital systems want to keep patients healthy
(As an aside though, hospitals cannot want anything, but the people who work in them can.)
But however well intended, or at least rationalized, marketers pushing their greater involvement in patient experience, even if it is not self-serving, seems like just another push for the managerialism that already haunts health care.
Managerialism
is the belief that trained managers are better leaders of health care,
and every other sort of organization, than are than people familiar with
the particulars of the organizations' work. Managerialism has become
an ascendant value in health care over the last 30 years. The majority
of hospital CEOs are now management trained, but lacking in experience
and training inmedicine, direct health care, biomedical science, or
public health. And managerialism is now ascendant in the US
government. Our president, and many of his top-level appointees, are
former business managers without political experience or government
experience.
We noted
an important article that in the June, 2015 issue of the Medical
Journal of Australia(1) that made these points about managerialism:
- businesses of all types are now largely run by generic managers,
trained in management but not necessarily knowledgeable about the
details of the particular firm's business
- this change was motivated by neoliberalism (also known as economism or market fundamentalism)
- managerialism now affects all kinds of organizations, including health care, educational and scientific organizations
- managerialism makes short-term revenue the first priority of all organizations
- managerialism undermines the health care mission and the values of health care professionals
Managerialism may be a major cause of mission-hostile management.
In non-profit hospitals, mission-hostile management threatens care of vulnerable patients, particularly by prioritizing hospital revenues, and the financial
self-interest of management over patient care. Note that the rise of the manager-leader occurred at a time when management
schools increasingly preached the dogma that maximizing shareholder value,
usually equivalent to maximizing short-term revenue, should be the
first, if not the only goal of all managers (look here). For example, an article on the miseducation of Sheryl Sandberg, Facebook's chief operating officer, asserted that
Harvard Business School, like much of the M.B.A. universe in which Sandberg was reared, has always cared less about moral leadership than career advancement and financial performance.
Managerialists may be convinced that they are working for the greater good. However, I am convinced that our health care system would be a lot less dysfunctional if it were led by people who actually know something about biomedical science, health care, and public health, and who understand and uphold the values of health care and public health professionals - even if that would cost a lot of very well paid managerialists their jobs.
Reference
1. Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM. The scourge of
managerialism and the Royal Australasian College of Physicians. Med J
Aust 2015; 202: 519- 521. Link here.
We have posted about the plight of the corporate physician. In the US, home of the most commercialized health care system among developed countries, physicians increasingly practice as employees of large organizations, usually hospitals and hospital systems, sometimes for-profit. The leaders of such systems meanwhile are now often generic managers, people trained as managers without specific training or experience in medicine or health care, and "managerialists" who apply generic management theory and dogma to medicine and health care just as it might be applied to building widgets or selling soap.
We have also frequently posted about what we have called generic management, the manager's coup d'etat, and mission-hostile management.
Managerialism wraps these concepts up into a single package. The idea
is that all organizations, including health care organizations, ought to
be run people with generic management training and background, not
necessarily by people with specific backgrounds or training in the
organizations' areas of operation. Thus, for example, hospitals ought
to be run by MBAs, not doctors, nurses, or public health experts.
Furthermore, all organizations ought to be run according to the same
basic principles of business management. These principles in turn ought
to be based on current neoliberal dogma,
with the prime directive that short-term revenue is the primary goal.
Now there are a few signs that the physicians are getting fed up with having to answer to generic management and managerialism.
I found two stories, perhaps somewhat related, about physicians unionizing to stand up to their new often managerialist overseers. The most prominent was in the New York Times on January 9, 2016, provocatively titled "Doctors Unionize to Resist the Medical Machine." It tells the story of how the hospitalists at PeaceHealth Sacred Heart Medical Center in Springfield, Oregon, formed a union de novo. The second started with a brief article in the Seattle Times on December 27, 2015, about how housestaff at the University of Washington (UW) revived a housestaff association and turned it into a union.
Managerialism as the Stimulus at PeaceHealth
The long article about PeaceHealth showed that managerialist leadership of the hospital system was the chief stimulus for unionization.
Managerialist Tactics: Outsourcing
The NYT article opened with
in the spring of 2014, when the administration announced it would seek bids to outsource its 36 hospitalists, the hospital doctors who supervise patients’ care, to a management company that would become their employer.
The outsourcing of hospitalists became relatively common in the last decade, driven by a combination of factors. There is the obvious hunger for efficiency gains. But there is also growing pressure on hospitals to measure quality and keep people healthy after they are discharged. This can be a complicated data collection and management challenge that many hospitals, especially smaller ones, are not set up for and that some outsourcing companies excel in.
Outsourcing is a now familiar entry in the managerialists' playbook. It is seen more in manufacturing than in health care. Although touted as improving economic "efficiency," it also may reduce the accountability of the managers of the organization that does the outsourcing.
Pursuit of Economic Efficiency
In this case,
Outsourced hospitalists tend to make as much or more money than those
that hospitals employ directly, typically in excess of $200,000 a year.
But the catch is that their compensation is often tied more directly to
the number of patients they see in a day — which the hospitalists at
Sacred Heart worried could be as many as 18 or 20, versus the 15 that
they and many other hospitalists contend should be the maximum.
It
was the idea that they could end up seeing more patients that prompted
outrage among the hospitalists at Sacred Heart, which has two facilities
in the area, with a total of nearly 450 beds. 'We’re doctors, we’re
professionals,' Dr. [Rajeev] Alexander said. 'Giving me a bonus for
seeing two more patients — I’m not sure I should be doing that. It’s not
safe.' (A hospital representative said patient safety was 'inviolate.')
A constant theme of managerialism, and the neoliberalism that underlies it, is economic efficiency. The usual narrative is that efficiency means providing better goods and services at lower costs. Instead, managerialism and neliberalism may mean decontenting goods and services so as to lower costs to the organizations providing them, but not necessarily providing more value to consumers. In health care terms, managerialism and neliberalism may lead to less accessible, more mediocre health care that increase revenue to the organizations providing it, as implied by the physicians' comments above. Making the US the most commercialized, managerialist run, and
arguably neoliberal health care system among the developed countries
has not led to lower costs, better access, or better health care
quality.
The backstory for the outsourcing emphasizes that managerialism, and the resulting economic efficiency was indeed the goal of PeaceHealth...
In 2012, Sacred Heart’s parent, PeaceHealth, a nonprofit health care system, installed an executive named John Hill to adapt its Oregon hospitals to the latest trends in health care. Mr. Hill, in an effort to rein in the budget and improve the efficiency of a hospital that administrators said was lagging in key respects, including how long the typical patient stayed, eventually concluded that the hospitalists at Sacred Heart should be outsourced.
Centralization of Control
Furthermore,
The hospitalists also chafe at the way the administration has tried to centralize decisions they used to make for themselves. This might include hiring fellow doctors or the order in which they see patients on any day. They also complain of being loaded down with administrative tasks.
'We’re trained to be leaders, but they treat us like assembly line workers,' said Dr. Brittany Ellison, a hospitalist in the group. 'You need that time with the patient,...'
A major feature of managerialism is the concentration of power within (generic) management. To quote Komesaroff(1),
In the workplace, the authority of management is intensified, and
behaviour that previously might have been regarded as bullying becomes
accepted good practice. The autonomous discretion of the professional is
undermined, and cuts in staff and increases in caseload occur without
democratic consultation of staff. Loyal long-term staff are dismissed
and often humiliated, and rigorous monitoring of the performance of the
remaining employees focuses on narrowly defined criteria relating to
attainment of financial targets, efficiency and effectiveness.
We're Only In It for the Money
Also, the negotiations that started once the PeaceHealth physicians formed their union demonstrated a central tenet of managerialism
Even starker than the divide over these questions are the differences
in worldview represented on opposite sides of the table. During a
bargaining session last fall, the administration proposed increasing the
number of shifts a year. Hospitalists now earn about $223,000 a year
for 173 shifts and are paid extra for working more. The hospital offered
$260,000 for a mandatory 182 shifts, and up to $20,000 in bonus pay for
hitting certain medical performance targets. The hospitalists work
seven days on and seven days off, so this would have effectively
eliminated any time off for sick days or vacation.
When
the doctors pointed this out, the administration responded that if they
missed a few days, it would make sure they got extra days to hit the
required number of shifts for full pay.
The
hospitalists assured the administration negotiators that their concern
had nothing to do with money — that none of this had ever been about
money. They preferred to work less and make less to avoid burnout, which
was bad for them and worse for patients. At which point the
administration responded that money was always the issue, according to several people in the room. (The hospital declined to comment.)
Suddenly
it dawned on the doctors why they had failed to break through, Dr.
Alexander said. 'Imagine Mr. Burns,' the cartoonishly evil capitalist
from 'The Simpsons,' 'sitting across the table,' he said. 'There’s no
way we can say, 'This isn’t what we’re talking about. We’re not trying
to get the bonus.''
Again, managerialism is based on neoliberalism, and neoliberal view is that the market rules. The market is the arbiter of success, and money is the only outcome that matters. As Komesaroff put it(1),
The particular system of beliefs and practices defining the roles and
powers of managers in our present context is what is referred to as
managerialism. This is defined by two basic tenets: (i) that all social
organisations must conform to a single structure; and (ii) that the sole
regulatory principle is the market.
We
carry on the healing mission of Jesus Christ by promoting personal and
community health, relieving pain and suffering, and treating each person
in a loving and caring way.
Ostensibly, this is accompanied by core values, such as,
Stewardship
We
choose to serve the community and hold ourselves accountable to
exercise ethical and responsible stewardship in the allocation and
utilization of human, financial, and environmental resources.
and,
Social Justice
We build and evaluate the
structures of our organization and those of society to promote the just
distribution of health care resources.
We have frequently discussed how leadership of contemporary health care organizations often seem to act contrary to the organizations' stated mission, that is, mission-hostile management.
Value Extraction
Finally, while managerialism is ostensibly concerned with economic efficiency, whose efficiency matters. When managers address physicians' efficiency, they seem to look at
amount of work done divided by the cost to the hospital of paying
physicians. However, they never seem to look at their own costs, the
costs of management, as being a negative.
The PeaceHealth 2014 form 990,
the latest available, states that the then CEO, Mr Alan Yordy (whose
highest academic degree was an MBA, according to his LinkedIn page) had
total compensation in 2013 of $1,366,742, and 11 other managers had
total compensation greater than $250,000, with 9 having total
compensation greater than $500,000. Those figures should be compared to
the highest compensation offered the hospitalists, a maximum of
$280,000 for 182 shifts a year, eliminating all vacation and sick leave. So if it is all about the money, the managers are making the most of
it.
We have discussed ad nauseum the ridiculous compensation
of the leaders of health care organization, even non-profit
organizations. Value extraction by top management has become a central
feature of the US and global economy (look here).
The NYT article did not discuss whether the upset hospitalists knew about their bosses' compensation. I suspect they did.
Forming a Functioning Union at the University of Washington
The media coverage of the UW housestaff unionization was less detailed. It does appear, though, that a stimulus was the pursuit of economic efficiency by UW management through squeezing the pay of housestaff, as described in the December article in the Seattle Times. In it the house staff said,
they
account for about one-fifth of King County’s doctors and they want
higher pay, new child-care benefits and free parking. Some UW residents
and fellows earn so little that they qualify for welfare programs like
Temporary Assistance for Needy Families and the Seattle City Light
Utility Discount Program, according to the UWHA [University of
Washington Housestaff Association.]
The
association has proposed that residents and fellows earn at least the
same salary as the UW’s lowest-paid physician assistants. Because the
doctors in training work very long hours, they sometimes earn less than
Seattle’s minimum hourly wage, the UWHA has said.
The
council members, in their letter to Cauce, called the situation
shocking. And based on information from the UWHA, they wrote that some
residents and fellows qualify for welfare programs like Temporary
Assistance for Needy Families (TANF).
The Seattle
articles noted that the UW housestaff may earn from just over $53,000 to
just under $70,000 a year. Keep in mind, however, that under current
rules, house staff may work up to 80 hours a week. So $53,000 for
someone working those hours translates into $13.25/ hour, under what many
people now claim is the living wage. That could be considered exploitation of workers with doctoral degrees working in often
highly stressful situations where lives may be on the line. Whether there were issues other than money (and
the respect it implies) involved at UW was not apparent based on the
minimal press coverage.
So it appeared that the hospitalist physicians working for PeaceHealth, and most likely the housestaff of the University of Washington were pushed to unionize to counteract the managerialism of their hospital leaders.
The Results of Unionization So Far
In my humble opinion, similar stories to those at the PeaceHealth hospital about managers pushing physicians to increase productivity and efficiency, seemingly with little regard for the effect that might have on patient care and physicians' professionalism can be found at many hospitals and health systems. Housestaff may be paid at little more than minimum wage rates at many training institutions. However, employed physicians have rarely effectively resisted up to now. Perhaps one reason is that at many institutions, each employed physician has his or her own contract, and may feel little power to negotiate his or her working conditions independently. Housestaff physicians obviously might feel they have even less leverage. But at PeaceHealth Sacred Heart, the physicians had other ideas:
Amid the groaning, a relatively new member of the group named Dr. David Schwartz observed, 'They can’t fire all of us — there are unions.' This was a bit of a stretch: While there are hospitals around the country whose doctors are unionized, there did not appear to be a union anywhere composed of a single group of specialists. But Dr. Schwartz, a barrel-chested man with close-cropped hair and a bushy beard who would not look out of place at a graduate English seminar, thought unionizing might be worth a try.
At the time, it was only one of several options the doctors considered. They talked of forming an independent hospitalists group, of forming an alliance with an outsourcing firm of their choosing. But the alternatives gradually fell away for a variety of practical reasons, and the doctors were growing increasingly bitter.
Dr. Littell developed a riff, which the other hospitalists appropriated, about how the situation was like having your spouse of several decades announce he or she was going to play the field. 'You’ve been great, you’ve always been there,' he would joke. 'I just heard there could be better spouses out there.' The kicker: 'The good news is, you’re in the running, too!'
Amazingly, the unionization at PeaceHealth Sacred Heart was at least partially successful,
By March 2015, the PeaceHealth leadership, whatever its interest in efficiency gains, was apparently not pleased that one of its hospitals had a white-collar labor insurrection on its hands. The company announced that it would not outsource the hospitalists, a move it later said was always a possibility. Mr. Hill, who declined to comment, left in May.
The union did defeat the outsourcing tactic. But otherwise results have not been so quick to appear,
Noting that the negotiations with the hospital administration have dragged on for roughly a year, Dr. Schwartz said, 'It’s pretty obvious that they don’t want to get a contract done.' He says the administration worries that if it essentially rewards the hospitalists with a contract, it encourages other hospital workers to unionize too.
The housestaff at UW used a slightly different set of tactics, but still managed to form a real union. Per the earlier Seattle Times article,
Established in 1964, the UWHA was mostly dormant during the 1980s and 1990s, according to the association’s website. It became active again starting in 1999. In 2013, members proposed making it a state-recognized collective-bargaining unit.
The UW petitioned the state Public Employment Relations Commissionto block the move, arguing that the residents and fellows were students paid stipends rather than employees paid salaries. But the commission sided with the residents and fellows, who last year voted to unionize.
The housestaff association has succeeded in negotiating. But as did the PeaceHealth doctors, they have not yet been able to secure their positions, per the later article.
University of Washington brass say they’re committed to providing the UW’s medical residents and fellows with decent compensation and benefits, but they insist the newly unionized doctors in training are asking too much in contract negotiations.
So,
Talks have been stalled for some time but are set to resume this month with a mediator assigned by the state Public Employment Relations Commission.
The two sides 'remain far apart in the area of compensation,' Joyner wrote in his letter.
Parenthetically, unexplored in any of the press coverage is whether the parallels between what is going on at PeaceHealth and the University of Washington have to do with explicit ties between the organizations. In 2013, per Beckers' Hospital Review, the news broke that the two institutions signed a letter of intent to create a "strategic alliance." In 2014, an article in the Seattle Times noted the ongoing concerns of housestaff and students at UW that the alliance could be diminishing their educational opportunities.
Summary
In one sense, it is amazing that physicians are now starting to unionize as a response to the managerialism of their leaders. It was not all that long ago when the majority of physicians worked as solo practitioners or in small group practices, and fiercely defended their autonomy. The last thing they would have thought about was unionization. Since physicians were their own bosses, with whom could their unions have negotiated? In addition, in the US, independent physicians and physician practices could not legally unionize. Practices that discussed such issues as fees were liable to anti-trust prosecution. And with what bosses could they have conceivably negotiated.
Yet now physicians are increasingly corporate employees, hence corporate physicians. At the moment, unionizing may be one of the few effective tactics health care professionals can use to halt the march of managerialism/ generic management and partially relieve the plight of the corporate physician (and health care professional.) However, in the long run, as long as people who care more about money than about patients' and the public's health run health care, even unions will not be able to make that much progress, and not without adverse effects.
It would take true health care reform to address the larger problems with health care and society that is now leading to physicians unionizing. In my humble opinion, hospitals, health care systems, and other "provider organizations" should seek better patient care, not growth. Should they not voluntarily downsize (an almost comical idea in the current context), anti-trust enforcement, and probably new legislation would be needed to stop their pursuit of market dominance and return them to responsible community organizations. The now much smaller hospitals, and provider organizations should not be run for profit, and the commercial practice of medicine should again be illegal. Most physicians should go back to being private practitioners as individuals or within small groups. Leaders of hospitals and provider organizations should be accountable for putting patients' and the public's health first, upholding professional values, and should not expect to get rich doing so. But I dream on....
Musical Interlude
To lighten things up, if only a little, here is the YouTube video version of the full third album by the Mothers of Invention, led by the incomparable Frank Zappa, "We're Only In It for the Money."
ADDENDUM (21 January, 2016) - This post was republished on the Naked Capitalism blog.
Reference
1. Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM. The scourge of
managerialism and the Royal Australasian College of Physicians. Med J
Aust 2015; 202: 519- 521. Link here.
As we wrote in 2006... in 1988, Alain Enthoven, an original member and driving force of the
Jackson Hole group, published a short manifesto about "managed
competition." (Entoven AC. Theory and Practice of Managed Competition in
Health Care Finance. Amsterdam: North Holland, 1988.) This is now not
easy to find (but see Amazon here).
In this volume, Enthoven expounded on his scheme to wrest power over
health care from physicians and give it to managers and bureaucrats. Enthoven thought of physicians as part of a tightly organized "guild,"
that is, an economic alliance. His model for this was a pre-World War
II document from a French medical society. Basically, he thought such
guilds, which he believed to be in place in all Western democracies
except in the UK and Scandinavia, were based on principles that were
"not the natural expression of a free market in health care," (p.33) and
furthermore, that the guild model associated with health insurance
"makes it very difficult for government or private payors to control
cost growth," (p.41) while they paradoxically "can also produce poor
service (p. 42). To combat physicians' overwhelming economic power,
Enthoven called for managers to use "tools they have found to counteract
market failure." (p. 98) Finally, he suggested using a coordinated strategy to "break up the guild," noting that "overcoming the guild has not been easy in the United States.... However, the guild has broken down." (P. 122)
How much the guild has broken down, leaving health care leadership in the hands of managers, was illustrated by a recent research letter in the Mayo Clinic Proceedings (Logeman AL et al. Who Influences Health Care in the United States? A Study of Trends From 2002 to 2018. Mayo Clin Proc 2019; 94: 2360-1. Link here.)
Managers are Now the Most Influential People in Health Care
The authors studied the list of the 100 Most Influential People in Healthcare published by Modern Healthcare yearly since 2003. (The 2018 version is here.) They stated that:
Because it receives wide reporting and limited critique, this list stands as a useful longitudinal account of who others perceive to be in a position to influence health care.
Then,
Using the published yearly list and the reported characteristics of the persons listed, we sought to determine the relative ranking over time, covering the period 2002 to 2018, of executives and administrators, academics and frontline advocates, and government officials. To achieve this, we determined the influencer’s sex and role (executive, member, independent, or other) as well as the sector from which each individual exerted their influence grouped into industry (nonprofit, for profit, payers, products, and providers), academia/advocacy, and government.
The results showed a striking trend over time.
There were 1700 persons named from 2002 to 2018, a minority of them women (range over the period, 17% to 28%). Most influencers are top executives from nonprofit health care provider organizations; their proportion has increased from 23% in 2002 to 72% in 2018, with an apparent substantial upward inflection in this trend since 2009 (Figure). This predominance appears to be at the expense of academics, advocates, and government officials.
A news article that featured an interview with Dr Victor Montori, the senior author of the article, noted in fact that the most recent (2018) list included quite a few CEOs of large for-profit health care corporations.
Among those topping the latest installment of the influential Modern Healthcare power index are the corporate heads of Amazon, Apple, Aetna, Humana, CVS and Minnetonka, Minn.-based United Health/Optum.
The authors concluded that
perceived influence over US health care of chief executives of health systems is increasing. To the extent that the ranking validly reflects influence, the sharp rise in the influence of chief executive officers at the expense of representatives of patients or health professionals may underscore the increasing industrialization of health care. It is not possible to find patients, patient advocates, clinicians, or clinician advocates at the top of this list. This trend placing health care influencers within C-suites, accountable to boards mostly comprising other corporate leaders, may explain the rise of business language and thinking
They suggested that it is possible that there is a
causal association between the concentration of executive influence and problems of patient care derived from efforts to optimize operational efficiency and financial performance, for example, clinician burnout, the heavy burden of treatment afflicting patients with chronic conditions, and the erection of barriers to care to optimize 'payer mix.'
Dr Montori also said in the interview
Americans increasingly find themselves in a corporate-centric healthcare echo-chamber, one in which the public will increasingly approach tough policy decisions having heard only the viewpoint from the top.
'The primary goals of CEOs are to advance the mission of their organization,' Montori says. 'If all that influences healthcare are the ideas of people who advocate for the success of their organizations, people who are not served by them will not have their voices heard.'
Furthermore, he suggested that the public may be befuddled by the current health policy debates, including those about universal health care and the possibility of reducing the power of commercial health insurance companies because
in the rest of the narrative all that they hear is about are the successes of biotech, the successes of tech companies, and the successes of healthcare corporations who achieve high levels of innovation thanks to the bold leadership of their executives. It's why we have been calling for greater awareness of the industrialization of healthcare for some time now
Summary
The new study by Longman, Ponce, Alvarez-Villalobos and Montori adds to the evidence that health care has been taken over by business-trained managers, and in the US, especially by large commercial health care organizations run by such managers.
Since we started Health Care Renewal, we have frequently discussed the rise of generic managers, which later we realized has been called managerialism. Managerialism
is the belief that trained managers are better leaders of health care,
and every other sort of organization, than are than people familiar with
the particulars of the organizations' work. Managerialism has become
an ascendant value in health care over the last 30 years. The majority
of hospital CEOs are now management trained, but lacking in experience
and training in medicine, direct health care, biomedical science, or
public health. And managerialism is now ascendant in the US
government. Our president, and many of his top-level appointees, are
former business managers without political experience or government
experience.
We noted
an important article in the June, 2015 issue of the Medical
Journal of Australia(1) that made these points:
- businesses of all types are now largely run by generic managers,
trained in management but not necessarily knowledgeable about the
details of the particular firm's business
- this change was motivated by neoliberalism (also known as economism or market fundamentalism)
- managerialism now affects all kinds of organizations, including health care, educational and scientific organizations
- managerialism makes short-term revenue the first priority of all organizations
- managerialism undermines the health care mission and the values of health care professionals
Generic
or managerialist managers by definition do not know much about health
care, or about biomedical science, medicine, or public health. They are
prototypical ill-informed leadership,
and hence may blunder into actual incompetence. They are trained that
they have a right to lead any sort of organization, which breeds
arrogance. These managers are not taught about the values of health
care professionals. Worse, they are taught in their business style
training about the shareholder value dogma, which states that the main
objective of any organization is to increase revenue. Thus, they often
end up hostile to the fundamental mission
of health care, to put care of the patient and the health of the
population ahead of all other concerns, which we have called
mission-hostile management. (Furthermore, it appears that the shareholder value dogma is just smokescreen to cover the real goal of managers, increasing their own wealth, e.g., look here.) Finally, arrogance and worship of revenue
allows self-interested and conflicted, and even sometimes corrupt
leadership.
Managerialists may be convinced that they are working for the greater
good. However, I am convinced that our health care system would be a
lot less dysfunctional if it were led by people who actually know
something about biomedical science, health care, and public health, and
who understand and uphold the values of health care and public health
professionals - even if that would cost a lot of very well paid
managerialists their jobs.
Maybe someday the top "influencers" in health care will actually be people who know something about health care and actually care about patients' and the public's health.
Note (25 November, 2019): this post was re-posted by the Naked Capitalism blog here.
We have frequently posted about what we have called generic management, the manager's coup d'etat, and mission-hostile management.
Managerialism wraps these concepts up into a single package. The idea
is that all organizations, including health care organizations, ought to
be run people with generic management training and background, not
necessarily by people with specific backgrounds or training in the
organizations' areas of operation. Thus, for example, hospitals ought
to be run by MBAs, not doctors, nurses, or public health experts.
Furthermore, all organizations ought to be run according to the same
basic principles of business management. These principles in turn ought
to be based on current neoliberal dogma,
with the prime directive that short-term revenue is the primary goal.
One Explanation - Finance Leaders Ascendant on the Boards of Health Care Non-Profits
I just found a useful article that provides one explanation for the rise of managerialism in health care non-profit organizations. It postulated that the increasing prevalence of leaders of finance firms on the baords of trustees of such organizations led to increasingly managerialistic leadership.
Thanks to a link from Naked Capitalism to a post on ShadowProof that led to an article in the Stanford Social Innovation Review by Garry W Jenkins, entitled, "The Wall Street Takeover of Nonprofit Boards."
It described a study of the membership of the boards of 23 of "the
nation's leading private research universities," most of which have
medical schools and academic medical centers, and all of which have
major biomedical and/ or health care research operations, as well as
leading liberal arts colleges and large New York City non-profit
organizations, including a few hospitals. (We will restrict our
discussion of the quantitative results to the former group of leading
universities.)
The most important result was that 40%
of trustees of the universities in 2014 "had a substantial professional
career in finance," up from 19% in 1989. Futhermore, in 2014, 56% of
university board leadership positions were held by people from finance,
up from 26% in 1989. The author noted that the prevalence of people
from the finance sector on university boards was far bigger than their
prevalence in the population. Only 6% of the private non-farm workforce
in the US was in finance in 2012.
The author summarized his findings:
Over
the past twenty-five years the compostion of the boards at some of
America's most important nonprofit organizaI I has dramatically
changed. Without much notice, a legion of Wall Street executives
(investment bankers, hedge fund managers, and others) has taken a
growing number of seats in nonprofit boardrooms. Not only that, they
hold a disproportionate share of the leadership positions on these
boards.
He then linked the increasing dominance of
non-profit governance to the increasing tendency of these organizations
to be run like for-profit businesses, that is, the rise of
"managerialism."
Scholars and practitioners have
documented various pressures placed on nonprofit organizations by donors
and private foundations to adopt business approaches.
Although
some of the pressure to adopt business approaches has come from
external forces, it may also be true that the concepts and norms of
philanthrocapitalism are also now carried into nonprofit organizations
by the directors of public charities themselves.
He then provided a much more detailed discussion:
As
financiers come to dominate the boards of leading nonprofits, it is not
surprising that their approaches and priorities have made their way,
very explicitly and fundamentally, into the governance of the nonprofit
sector. Practices such as data-driven decision-making, an emphasis on
metrics, prioritizing impact and competition, managing with three- to
five-year horizons and plans, and advocating executive-style leadership
and compensation have all become an essential part of the nonprofit
lexicon.
Nonprofit leaders regularly hear about these
finance practices from board members and donors whose native habitat is
the financial services world. Moreover, nonprofit managers have come to
accept them as reasonable principles upon which donors base their
giving. More often than not, organizations are also expected to
incorporate these principles in the management of the not-for-profit
enterprises for which managers and boards share responsibility.
Although
many of these business approaches may strengthen nonprofit capacity, we
should also be mindful of the ways in which these same tools can morph
into pathologies, ignore the costs or trade-offs associated with
extending business thinking to the charitable sector, or distort
organizational priorities. Numerous critics have written thoughtfully
about the ways in which market-based thinking and approaches applied to
the nonprofit sector provide false promise, with the potential to dilute
charitable values, undermine long-term mission focus, incentivize
small, incremental goals, and threaten shared governance and other forms
of participatory problem-solving.
Beyond leading to
the borrowing of financial concepts and tools in the boardroom, the rise
in the number of nonprofit directors with ties to finance may also
contribute to deeper changes in the underlying institutional values and
motivations, a trend that economic sociologists refer to as the
financialization of the nonprofit sector.
Financialization
describes a spread of financial logics, influence, and strategies into
new fields and organizations in ways that transform the culture,
policies, and values of institutions. Indeed, wealthy nonprofits-like
colleges, universities, and museums-have long engaged with financial
markets as endowment investors, but the scope and scale of today's
nonprofit borrowing, aggressive debt financing, securitization
transactions, and complex real estate transactions is unprecedented.
Such shifts may affect the organization's strategic direction and
orientation in a number of ways, including directing board and
management attention to debt service, incentivizing organizations to
invest resources on activities that return higher profit margins to
cover debt service, elevating the centrality and importance of financial
managers in strategic planning and decision-making, and increasing the
need for and power of senior staff well versed in complex financial
instruments.
The list of practices above and the description of financialization sound very much like standard operating procedures of generic management which we have previously described. The discussion of pathologies above sounds similar to our discussions of how managerialism distracts from or undermines the mission.
The one quibble I have with Jenkins' discussion is that it puts almost the entire onus on the financial leaders on the boards of trustees, rather than the top managers of the organizations. It may be that increasingly financialized boards hire increasingly generic managers, but there may be a symbiosis between the two groups.
So Jenkins' conclusion seems reasonable:
if boards are to operate as designed, and if they are to be maximally effective, then the composition of nonprofit boards must be more diverse and not dominated by financiers.
But the problem of financial sector domination of health care non-profit boards may be even worse than that Jenkins describes.
The Dark Side of Finance
Even though Mr Jenkins is concerned about excess of influence of too many financially oriented people on the boards of non-profits, he is quite respectful of those in the finance field. "Individual finance professionals do bring skills, wisdom, and other positive attributes to nonprofit boards." He also wrote, "This is not to say that finance professionals care less (or more) about a nonprofit organization or its mission. Nor do I believe that all finance professionals think alike." Many finance professionals may be very well-intentioned, of course. But Jenkins seems to thus ignore the dark side of finance's recent history.
Finance firms are certainly known for the use of "financial logics, influence and strategies," and the employment of specific practices. However, after 2008, they were also known for dangerously slipshod, if not unethical, sometimes corrupt management.
In 2008, the global financial collapse/ great recession reshaped the global economy, and has been linked to the stagnation of the middle class and growth of plutocracy. There have been numerous discussions of the role of the leadership of financial organizations in these events. The blog Naked Capitalism has been covering these issues from the global financial collapse to the current day. Some of the very many excellent sources on this era include the movie Inside Job,
A chapter in Predator Nation was entitled "Crime and Punishment: Banking and the Bubble as Criminal Enterprises. In it, Mr Ferguson noted the following list of
prosecutable crimes committed during the bubble, the crisis, and the aftermath period by financial services firms ...
Securities fraud (many forms)
Accounting fraud (many forms)
Honest services violations (mail fraud statute)
Bribery
Perjury and making false statements to federal investigators
Sarbanes-Oxley violations (certifying false accounting statements)
RICO offences and criminal antitrust violations
Federal aid disclosure regulations (related to Federal Reserve loans)
Personal conduct offenses (many forms: drug use, tax evasion, etc)
Most of these never led to prosecution in an era of the revolving door and exceedingly lax law enforcement of actions by big corporations ("too big to jail") Yet Ferguson argued for investigation of possible illegal acts by many large companies, and specifically named Citigroup, AIG, Lehman Brothers, Goldman Sachs, JP Morgan Chase as worthy of investigation.
Many of these organizations' leaders also were on the boards of health care organizations. Since 2008, we began noting that the governance of prominent health care non-profits was often dominated by finance firms, including those implicated in the 2008 collapse, although our observations were case-based, not quantitative. The concern was not simply that health care organizations were being led into generic management and "managerialism," but that that the incompetence, unethical behavior, and corruption in the finance sector could cause equally bad problems in health care. We have no systematic proof of that, but consider some of our more colorful cases, which include leaders of the financial firms named by Mr Ferguson...
Hedge Fund U - Bernie Madoff, the supposed finance wizard who went to jail for a huge Ponzi scheme was on the board of Yeshiva University. The chairman of the board's finance committee was Ezra Merkin, a hedge fund operator who ran a "feeder" operation for Madoff's Ponzi scheme.
A Board of Trustees, or a Social Club for the Superclass? - Of the 29 non-physician board members of the Hospital for Special Surgery, 23 had major relationships with, and many of these had leadership roles in finance firms, including such bailed out, too big to fail firms as AIG, Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, and Wachovia.
A "Very Well Paid Boob" on the Harvard Corporation? - the university's governing board included one of the architects of the overgrowth of Citigroup, which had to be bailed out, and also of the deregulation of finance which allowed the company to be too big to fail.
Yet outside of a few grumpy bloggers, the continuing presence of leaders of too big to fail, too big to jail, often bailed out financial firms on the boards of some of our most notable health care organizations and universities has attracted almost no comment, and less concern.
Summary
The continuing dysfunction of US health care, with ever rising costs, stagnant quality, and still inadequate access, is well known. There is constant loud argumentation over "Obamacare." (Congress just passed a repeal of it, which the president has threatened to veto.) Yet there is little in depth discussion or inquiry about what is really going wrong. The really unpleasant issues rarely surface in polite discussion. We have called this aversion to direct discussion of big problems the anechoic effect.
So I hope that there is more discusison of who gets to lead health care organizations, and who gets to sit on the boards that exercise stewarship over them. We need far more light shined on who runs the health care system, using what practices, to what ends, for the benefits of whom.
True health care reform would enable transparent, honest, accountable governance and leadership that puts patients' and the public's health over ideology, self-interest, and self-enrichment.
I just found an important article that in the June, 2015 issue of the Medical Journal of Australia(1) that sums up many of ways the leadership of medical (and most other organizations) have gone wrong. It provides a clear, organized summary of "managerialism" in health care, which roughly rolls up what we have called generic management, the manager's coup d'etat, and aspects of mission-hostile management into a very troubling but coherent package. I will summarize the main points, giving relevant quotes.
Recent Developments in Business Management Dogma Have Gravely Affected Health Care
Many health practitioners will consider the theory of business management to be of obscure relevance to clinical practice. They might therefore be surprised to learn that the changes that have occurred in this discipline over recent years have driven a fundamental revolution that has already transformed their daily lives, arguably in perverse and harmful ways.
these changes have by and large been introduced insidiously, with little public debate, under the guise of unquestioned 'best practice'.
See our previous discussions of the anechoic effect, how discussion of facts and ideas that threaten what we can now call the managerialist power structure of health care are not considered appropriate for polite conversation, or public discussion
Businesses are Now Run by Professional Managers, Not Owners
The traditional control by business owners in Europe and North America gave way during the 19th century to corporate control of companies. This led to the emergence of a new group of professionals whose job it was to perform the administrative tasks of production. Consequently, management became identified as both a skill and a profession in its own right, requiring specific training and based on numerous emergent theories of practice.
Among these many vicissitudes, a decisive new departure occurred with the advent of what became known as neoliberalism in the 1980s (sometimes called Thatcherism because of its enthusiastic adoption by the Conservative government of Margaret Thatcher in the United Kingdom). A reaction against Keynesian economic policy and the welfare state, this harshly reinstated the regulatory role of the market in all aspects of economic activity and led directly to the generalisation of the standards and practices of management from the private to the public sectors. The radical cost cutting and privatisation of social services that followed the adoption of neoliberal principles became a public policy strategy rigorously embraced by governments around the world, including successive Liberal and Labor governments in Australia.
Note that this is a global problem, at least of English speaking developed countries. The article focuses on Australia, but we have certainly seen parallels in the US and the UK. Further, note that we have discussed this concept, also termed market fundamentalism or economism.
Managerialism Provides a One-Size Fits All Approach to the Management of All Organizations, in Which Money Becomes the Central Consideration
The particular system of beliefs and practices defining the roles and powers of managers in our present context is what is referred to as managerialism. This is defined by two basic tenets: (i) that all social organisations must conform to a single structure; and (ii) that the sole regulatory principle is the market. Both ideas have far-reaching implications. The claim that every organisation — whether it is a mining company, a hospital, a school, a professional association or a charity — must be structured according to a single model, conforming to a single set of legislative requirements, not so long ago would have seemed bizarre, but is now largely taken for granted. The principle of the market has become the solitary, or dominant, criterion for decision making, and other criteria, such as loyalty, trust, care and a commitment to critical reflection, have become displaced and devalued. Indeed, the latter are viewed as quaint anachronisms with less importance and meaning than formal procedures or standards that can be readily linked to key performance indicators, budget end points, efficiency markers and externally imposed targets.
Originally conceived as a strategy to manage large and increasingly complex organisations, in the contemporary world, no aspect of social life is now considered to be exempt from managerialist principles and practices. Policies and practices have become highly standardised, emphasising market-style incentives, devolved budgets and outsourcing, replacement of centralised budgeting with departmentalised user-pays systems, casualisation of labour, and an increasingly hierarchical approach to every aspect of institutional and social organisation.
We have frequently discussed how professional generic managers have taken over health care (sometimes referred to as the manager's coup d'etat.) We have noted that generic managers often seem ill-informed about if not overtly hostile to the values of health care professionals and the missions of health care organizations.
Very Adverse Effects Result in Health Care and Academics
In the workplace, the authority of management is intensified, and behaviour that previously might have been regarded as bullying becomes accepted good practice. The autonomous discretion of the professional is undermined, and cuts in staff and increases in caseload occur without democratic consultation of staff. Loyal long-term staff are dismissed and often humiliated, and rigorous monitoring of the performance of the remaining employees focuses on narrowly defined criteria relating to attainment of financial targets, efficiency and effectiveness.
The principles of managerialist theory have been applied equally to the public and the private sectors. In the health sector, it has precipitated a shift in power from clinicians to managers and a change in emphasis from a commitment to patient care to a primary concern with budgetary efficiency. Increasingly, public hospital funding is tied to reductions in bed stays and other formal criteria, and all decision making is subject to review relating to time and money. Older and chronically ill people become seen not as subjects of compassion, care and respect but as potential financial burdens. This does not mean that the system is not still staffed by skilled clinicians committed to caring for the sick and needy; it is rather that it has become increasingly harder for these professionals to do their jobs as they would like.
In the university sector, the story is much the same; all activities are assessed in relation to the prosperity of the institution as a business enterprise rather than as a social one. Education is seen as a commodity like any other, with priority given to vocational skills rather than intellectual values. Teaching and research become subordinated to administration, top-down management and obsessively applied management procedures. Researchers are required to generate external funding to support their salaries, to focus on short-term problems, with the principal purpose being to enhance the university's research ranking. The focus shifts from knowledge to grant income, from ideas to publications, from speculation to conformity, from collegiality to property, and from academic freedom to control. Rigid hierarchies are created from heads of school to deans of faculties and so on. Academic staff — once encouraged to engage in public life — are forbidden to speak publicly without permission from their managers.
Again, we have discussed these changes largely in the US context. We have noted how modern health care leadership has threatened primary care. We have noted how vulnerable patients become moreso in the current system, e.g., see our discussions of for-profit hospices. We have discussed attacks on academic freedom and free speech, the plight of whistle-blowers, education that really is deceptive marketing, academic institutions mired in individual and institutional conflicts of interest, and the suppression and manipulation of clinical research. We have noted how health care leaders have become increasingly richly rewarded, apparently despite, or perhaps because of the degradation of the health care mission over which they have presided.
The Case Study
The article provided a case study of the apparent demise of the Royal Australasian College of Physicians as a physician led organization, leading to alleged emphasis on "extreme secrecy and 'commercial in confidence," growth of conflicts of interest, risk aversion on controversial issues. When members of the organization called for a vote to increase transparency and accountability, the hired management apparently sued their own members.
Authors' Summary
Whether the damage done to the larger institutions — the public
hospitals and the universities — can be reversed, or even stemmed, is a
bigger question still. The most that can be said is that even if the
present, damaging phase of managerial theory and practice eventually
passes, its destructive effects will linger on for many years to come.
My Summary
I now believe that the most important cause of US health care dysfunction, and likely of global health care dysfunction, are the problems in leadership and governance we have often summarized (leadership that is ill-informed, ignorant or hostile to the health care mission and professional values, incompetent, self-interested, conflicted or outright criminal or corrupt, and governance that lacks accountability, transparency, honesty, and ethics.) In turn, it appears that these problems have been generated by the twin plagues of managerialism (generic management, the manager's coup d'etat) and neoliberalism (market fundamentalism, economism) as applied to health care. It may be the many of the larger problems in US and global society also can be traced back to these sources.
We now see our problems in health care as part of a much larger whole, which partly explains why efforts to address specific health care problems country by country have been near futile. We are up against something much larger than what we thought when we started Health Care Renewal in 2005. But at least we should now be able join our efforts to those in other countries and in other sectors.
ADDENDUM (30 October, 2015) - This post was republished on the Naked Capitalism blog. See the comments, which are particularly interesting and important.
Reference
1. Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM. The scourge of managerialism and the Royal Australasian College of Physicians. Med J Aust 2015; 202: 519- 521. Link here. Musical Diversion
We have to leaven this dismal post with the 1980 live version of "Down Under" by Men at Work
