Creating New Health Care Ventures: The Role of Management. - book reviews

Physician Executive, Nov-Dec, 1992 by Michael B. Guthrie

In this column, members of the College's Vantage Council review books that they have identified as being of interest and value to the medical management profession. Reviews from other sources are included in Physician Executive as space permits.

Everybody has an angle. As health care in the United States has developed into an increasingly fragmented delivery system and a political hot potato, observers from many disciplines have offered perspectives on what is wrong and what to do about it. Some of these perspectives are useful and some are not. The perspective offered by Dr. Herzlinger is useful.

Dr. Herzlinger's most recent book follows her work at Harvard Business School and the course work that she developed there for the MBA program. The book is focused on attractive emerging opportunities for revolutionizing the provision of health care services and products in the United States and internationally. Her central question, and the utility of this book, focuses on how to manage these opportunities and create effective and efficient health care organizations. The book is 176 pages of general discussion and background information discussing this premise and a series of 20 case studies, in the familiar Harvard Business School format, that exemplify the new opportunities and the managerial skills necessary to succeed.

What are the three new opportunities for health care ventures? Dr. Herzlinger proposes that they are ventures to control health care costs, ventures to develop new technologies, and ventures to serve new health care consumers.

What particular skills are necessary to manage these new ventures? There are seven skills of management that are particularly important and the focus of this book: marketing, the management of regulation, finance, managerial control, human resource management, operations management, and leadership philosophy. There is a brief chapter on each skill, articulating the rationale for its choice as a significant skill and indicating the skill's application in several examples. There is then a brief chapter on evaluation of new ventures, planning, pro forma development, and financial assessment. The case studies are followed by two appendices on the structure and financing of the health care industry.

This is a good book for a new medical manager to review. It provides ways to look at our industry from the market side, rather than the professional perspective. Dr. Herzlinger's perspective, given her review and study of the health care industry for nearly a decade, is a useful stimulus for the new physician executive to break out of the traditional clinical perspective of one patient at a time and see the health care market from a broader, more comprehensive point of view.

In addition to this alternative perspective, Dr. Herzlinger has summarized critical managerial skills that need to be mastered if a physician executive is to become a competent executive. She offers not only a quick summary of particular management areas, such as marketing and finance, but also useful reading lists at the end of each section for further study in depth.

The case studies may be less useful for individual reading. Although they are excellent and well constructed, their utility is best achieved in group discussion with appropriate informed coaches or mentors. Reading the case studies is informative, but the book alone doesn't present them to their full advantage. Physician executives who are in organizations where other like-minded physicians practice and work might find the case studies useful as points of discussion in teams.

On the whole, the book will be more useful to a relatively novice physician executive than to one with more experience. The book is designed to give overall guidance and to demonstrate the applicability of specific management skills to new health care opportunities, rather than to provide details about those skills or to teach those skills in depth. The book is, however, well organized and well written, allowing for a quick review for any interested physician executive. It's market-oriented emphasis is an important continuing reminder for all of us.