Looking ahead - Leland Kaiser on the medical management profession

Physician Executive, Jan-Feb, 1990 by Wesley Curry

clinics, and HMOs, he says. "If we did everything we could to improve the current system, we would be treating only 10 percent of the problem," he says. "If we are going to keep insurance rates down to a reasonable size, if we are really going to serve industry, we have got to do something about the morbidity of the population." Dr.

Kaiser believes that HMOs will take some of the early, most creative steps to the solution of what he calls the "social pathology" problem. "Some HMOs are going to go to industry and say, `We don't want to be a vendor and we don't want to engage in competitive bidding. We want to come in and design with you. We want to try to put into place a system inside your industry that, over a 10-year period, will reduce social pathology and medical pathology.''' He says that industry will be willing to give HMOs the benefit of the market for those 10 years in return for lower premiums. Nearly two decades after its last dash across the national consciousness, the concept of national health insurance will return to the forefront in the '90s, according to Dr. Kaiser. He believes that passage will be achieved this time around. "It will be a nationalized financing system, not a national delivery system. The cost will be spread over the entire population via taxation, but private delivery systems will operate within that context," he says. He thinks that a tiered system will result. The lowest tier will look much like the British system. Supplemental insurance will allow some to buy above this threshold. The upper tier will be cash-based and will be where the more experimental, "exotic" care is provided, Dr. Kaiser says. National centers of excellence will play a key role in the health care system that Dr. Kaiser envisions. They will have national marketplaces and will offer essentially one service. They will recruit physicians, nurses, and other professionals on the basis of this narrow procedural, but national focus. "I am positioning a client now for the 21st Century, and our assumption is that 98 percent of the market will fly in. There will be no local market at all. Compared to the expense and uniqueness of the product, the notion of flying to get it means nothing," Dr. Kaiser says. It will be a national and international marketplace, and only tertiary centers will be able to play this game, he adds. Dr. Kaiser also believes that the marketplace will eventually remove the exclusivity of this service arrangement. "If you have the money, you will buy the service. As more consumers demand the service, production efficiency will bring the costs down. The service will drop from tier three to tier two. Eventually, once esoteric services will drop to tier one." It is the same economic phenomenon that brought color televisions and other high technology consumer products within reach of all financial classes, he says. There is no limit, Dr. Kaiser asserts, to the degree to which medical technology can improve human life. And, he says, there is no limit to the amount of money that people will be willing to spend on this technology. "I predict that health care will go past 22 percent of the gross national product. Indeed, the major driver of health care of the future will be technology. More and more exotic devices will come on line, and people will pay more and more for them." Most of the new technology will be located in the tier three centers. Individual pieces of technology have become very expensive. Dr. Kaiser predicts some regional ventures for the acquisition of new technology. The technology will be located at the tier three center, he says, but a regional system of 20, 30, 40, or more hospitals will have purchased the equipment, he says. Net result? People will live on average past the 100-year mark, and every body part will be replaceable. Dr. Kaiser describes a world in which one updates one's body just as one maintains and improves an automobile. A part goes bad? Replace it. Whole thing is a wreck? Use a cell to clone a new body, programmed with the memory of the old. Too good to be true? Maybe. Not a world that anyone should want? Perhaps. But there is no question, Dr. Kaiser says, that "technology will drive the health care industry in the 21st Century. It is possible, of course, that the driving may not be done in the United States. U.S. industry has frequently sought cheaper labor markets for the manufacture of products. Now the health care industry may seek the less regulated foreign scene for the provision of health care services. FDA won't approve a device? Set it up in Mexico. Dr. Kaiser thinks that the U.S. health system will be providing services worldwide from a variety of domestic and foreign locations, mainly because of regulation difficulties in this country. "Some of the devices and strategies that we need to use will take so long to get through the FDA that it won't be worth the effort. American physicians and institutions will cross the border. Not only will large companies drive the health care system; they will drive it a lot outside the continental U.S. because of the regulatory problem. So where is the physician manager in this scenario? "I see three phases for the physician manager in terms of the way he or she functions," Dr. Kaiser says. "In what I call the `production-driven' phase, the physician manager will have to use outcome measurement, cost control, quality improvement, case management, product line management, and treatment protocols by diagnosis. As a production manager, the physician executive will be concerned with profit targets, cost targets, quality targets, and all the rest." Once the physician manager has a fully efficient production unit operating, the next phase is the value-driven organization, Dr. Kaiser says. The meaning of production becomes the issue. Production is replaced by social mission, accomplishments, things that are desirable for the organization to do. He says that the second phase will dominate the '90s. In the third phase, the organization will become vision-driven. "This is the most exciting phase," Dr. Kaiser says. "Whatever we can imagine, we can create. We move out of reactive mentality and assume responsibility for ourselves. We can design this society any way we want and a health system any way we want, so we decide to design it in a way we can live with." "We are going to begin to ask," Dr. Kaiser says, "What is a human being? What is the potential of every child born in this institution?" The old ways will not do, he says. "For a long time, we thought the medical profession's only job is just to make sure we have a successful birth and then follow with some good child care. Not good enough. The streets are littered with those kind of people. We have to move to a more basic concept--the real purpose of the system is to grow people into their potential. Get them started in the right direction." Dr. Kaiser says that, from a technological point of view, genetic engineering in the next century will begin to accomplish this. The answer, for instance, to the drug problem, he says, is to create a natural high for people, so that they don't need drugs. Genetic engineering should be able to accomplish that, he says. A paradox for the next century will be that, as we move to high technology, we will also move to high touch, Dr. Kaiser says. One of the important distinctions to make in the years ahead in terms of medical care is the difference between curing and healing, he says. Curing is a problem for medical science. Healing is a problem of human love and nurturance, he says. "We can always heal people even if they can't be cured. The whole system has been oriented to curing. I have had the chance to work with people who, in fact, celebrate their disease and see it as a way of growing. They have learned to accommodate the disease and live with it. We're not going to cure them, but they're already healed." Dr. Kaiser expects healing to play a greater role in the system in the future. "I think the hospital of the future will say that it heals everyone who comes through its doors. Those it can cure, it cures." Dr. Kaiser calls this new hospital an "experiential organization." He says that it provides a "transforming experience" for the patient. "How the hospital knows it won is when the patient leaves the hospital saying it was the best experience he or she ever had." This is patient-centered care, Dr. Kaiser says, and it has never existed in this country. "When a patient comes into the hospital, wouldn't it be fascinating if we said, `Hospitalization is a guided experience. We will provide the medical and nursing services, but we want to make sure you are an enriched person when you leave. You will have better control of your life, a better sense of responsibility, more knowledge of your condition. You are a member of a team.'" Dr. Kaiser expects that vision to become reality. Hospitals will be much more centered around the patient. Three major obstacles lie in the path to the future, says Dr. Kaiser--antitrust, malpractice, and licensure. Until these encumbrances are removed, he says, it will not be possible to design a national health care system. "Licensure makes no sense in an information society," Dr. Kaiser says. In the future, he says, doctors will be trained and licensed through performance rating. Every two years, a physician will come into a simulator--a patient, a manikin, or a computer robot--just as airline pilots do. The simulator will face the doctor with 200 or more diseases and conditions over a limited period, and the doctor will have to respond with diagnoses and treatments. If the misdiagnosis rate is too high, or too many treatments fail, the doctor loses his or her license. "We have to move away from the notion that a license or a credential is a guarantee of quality and move toward the notion that the guarantee is the doctor's ability to perform," he says. Malpractice, as it is currently formulated, also has to go, Dr. Kaiser says. "National health insurance and the current malpractice system are incompatible. We have to decide which one we want, and the drive to national health insurance will create major revisions in the malpractice law," he says. Similarly with antitrust considerations. Dr. Kaiser says that the high costs of competition are unacceptable. Every facility does not need each new piece of technology. Instead of five facilities having 20 percent utilization of this equipment each, collaboration will allow one of them to reach 100 percent utilization. That will require some adjustment of the antitrust encumbrance, he says. Outcomes measurement will be the most significant development in the next five years for physician executives, according to Dr. Kaiser. Three questions will be asked, he says. "Does this procedure work? Is it worth its cost? Does it apply to this patient? The answers will eliminate 30 percent of what hospitals are currently doing," he says. Outcome measurement is going to force a scientific evaluation of everything we do on the basis of clinical trials, he insists. Dr. Kaiser sees no abatement in the political clout of the elderly. "The most powerful lobby in the United States is now and will continue to be the American Association of Retired Persons. Political power will pass into the hands of the older population, and they are very literate. They know the system. When the time comes to vote on benefits, you know what the answer will be." The medical profession will change just as rapidly as the health care system itself, Dr. Kaiser suggests. There will be more women in medicine, and they will "pay attention to life-style and not be interested in working themselves to death." He believes that that attitude will become more pervasive in medicine. And the increasing debt that new physicians will bring from their education and training will lead them more and more to salaried jobs and to groups. The biggest struggle in the years ahead will be between hospitals and medical staffs, according to Dr. Kaiser. In the past, there has been enough for everyone. Now the going will be rough, as reimbursement margins get more and more narrow. "Pretty soon, the hospital and its medical staff will start fussing with each other. The doctors will begin pulling out expensive diagnostic services as freestanding units, and the hospital will begin to move into primary care. The challenge in community hospitals will be dealing with the fracture." The successful model will be groups, he says. He admits that this will not set well with some, and the current dissatisfaction of physicians with medicine is apt to continue. However, the Mayo Clinic, Kaiser Permanente, Cleveland Clinic approach will become the norm, he says. As we move from curing to healing, a wider range of alternative health care practitioners will be asking for hospital privileges, Dr. Kaiser says. "Podiatry is a very humdrum thing compared to what is waiting out there. The pubic wants it and has paid for it, They are already diverting millions of dollars to the alternative health care marketplace." The question for physician managers, he says, will be how to control these people, establishing rules for quality, liability, and the like. He says that a single standard should be used--performance. "It either works or it doesn't. If it doesn't work, you don't use it." The challenge in sorting out all these professionals, Dr. Kaiser says, is the "politics of research." A lot of people have a vested interest in ensuring that some research never takes place, because they are afraid of the answers, he says. "The real trick of the future is how to sponsor research that might find that you don't need a psychiatrist for every patient who has a mental problems. In fact, half of what an orthopedist does can be done by a lesser trained person. You don't always have to do disk surgery; a chiropractor or an internist might suffice." Computers and robots will definitely be a part of the future physician executive's job, Dr. Kaiser says. "We are going to computerize all medicine. All bedside care in the future will be given by computers and nurses. Doctors will do no bedside care. Diagnosis, prognosis, and treatment. All by computer." There will be continous growth for the medical management profession through the '90s, Dr. Kaiser says. He believes that it will be the fastest growing specialty of medicine. "Every large medical organization will have a medical director or medical executive. Many more will be employed in the insurance industry and on the purchaser's side. We are in a very high demand period of at least 10 years." Unlike other physicians, Dr. Kaiser says, physician executives will continue to get salary increases. "A lot of physician income is going down. The physician executive salary, which is geared into the same wage structure as the CEO, will continue to rise for quite some time." What do physician executives do to position themselves for leadership roles? "They need to develop a breakthrough vision of what their future role is. They have to strengthen their knowledge base of management. Networking is one of the most important things they need to do to learn about each other and share information with each other. They need to sit on the top committees of their organizations--budget, finance, long-range planning, etc. They need to learn production management and help their organizations, and other physicians, enter the information age." Dr. Kaiser thinks it is especially important for physician executives to be computer literate and to help other physicians become computer literate. Finally, Dr. Kaiser says that physician executives will have to consciously develop their right-brain management skills. "The future is not logical, not linear, not cause and effect, not predictable. There is no way you are going into the future with your left brain. The future will require `full-brain' management. For most physician executives, that will mean cultivating the right side."