The rural health care enterprise: keeping up with the city slickers

Physician Executive, May, 1996 by Barry R. Silbaugh

But the frenzied consolidation activities of national and regional health care organizations is creating a mismatch in bargaining power with the fragmented, cottage industry of rural medical practice. It also brings a pool of incredible managerial talent and capital to these ever-larger and powerful health care organizations. Uniess physicians adjust to the realities of the rr.arket by consolidating their practices, hiring expert management talent equal to other segments of the health care industry, and preparing io manage financial risk, they will face dramatically declining incomes, and rtew career choices.

3. Both physicians and hospitals must find sensitive, sensible, and effec=tive leaders to create the environment for success in the rural health care enterprise. Many physicians lhave a natural bias toward physicians as leaders, but being a physician is not the sine pua non of effective leadership. Administrators or physiGians who understand the delicate and dangerous job of working with physiciarss, appreciating the reasons for their behavior, and protecting the need for clinical autonomy--along with understanding the hospital's need for rational planning and efficient operations management--are suitable candidates for leadership positions. These leaders come in all shapes and sizes, but they all share common traits: knowledge of and respect for their constituencies; political skills necessaryto deal with often conflicting goals of their constituencies; Lincolnesque dual attributes nf consistency and flexibility; long-term thinking, with a "generalist" view; optimism and a bias toward renewal of the health care system.

When I worked for Blue Cross and Blue Shield of New Mexico, one hospital administrator representing a rural PHO spent all of a 90-minute meeting with me negotiating DRG rates for the "H" component of the PHO, failing to even address the well-known fee concerns ofthe "P" component. It is difficult to believe that PHOs will succeed when this kind of "leadership" is often the norm, ratherthan the exception.

In contrast, another PHO has strong coleaders in an administrator and a primary care physician, who support each other and share a common vision for improved health and access to health services in their community. When listening to each of them speak, it is often difficult to distinguish which one is the admin strator, and which one the physician. When there is a spirit of collaboration and appreciation of differences among physicians and administrators in a community, efforts to mobilize the health care system can be successful.

Practical suggestions for success in rural health care syslams The market forces reshaping the urban health care scene will be ttre same in the rural setting: the cost reduction imperative. In fact, many of the suggestions ran be applied to the urban health care setting also. These suggestions are designed to interest both financiers of health care services, and the people and institutioos that provide those services. These strategies can he implemented without massive structural redesign, and play to the strengths and weaknesses of each player in the health care game.