I made the difficult decision to become the leader of a department of dermatology approximately 1 year ago. At that point, it immediately became incumbent upon me to begin my education in the financial aspects of managing a clinical department in an academic health care delivery center (AHDC), a job of increasing complexity and challenge due to the financial constraints imposed on such institutions by the managed care (managed cost) revolution in medicine. This was an especially daunting process because until that time, I had actively avoided involvement in the murky swamp of departmental finances and personnel management. Even as a vice chairman of a clinical department for 9 years, I was for the most part spared from such swamp lurking by the benevolence of a highly supportive chairman (Paul R. Bergstresser, MD, University of Texas Southwestern Medical Center at Dallas).
I set about this educational process initially by learning everything I could from the highly capable people who functioned as the chairman, departmental administrator, administrative clinic business manager, and faculty clinic business manager in the department I was to soon leave. I also began to read relevant books1-5 and spend more time reading relevant journals and newspapers (Academic Medicine, Health Economics, Modern Healthcare, Health Economics, Health Care Management Review, and the Wall Street Journal) and editorial and commentary sections of other journals (New England Journal of Medicine, Journal of Investigative Medicine, Journal of the American Medical Association, Annals of Internal Medicine, Archives of Dermatology, and Journal of the American Academy of Dermatology). After arriving at my new department, I quickly became immersed in the usual tangle of institutional leadership committees and had the opportunity to attend several highly useful postgraduate courses both within and outside of my new institution.
During this period, I became fascinated by the many platitudes currently used by the leadership cognoscenti of academic medicine. I thought it might be of interest to share this experience in the form of a pragmatic and informal glossary of AHDC economics and management. So that this would not be a totally trivial enterprise, I felt compelled to include among these truisms a sprinkling of economic and management terms and concepts of fundamental importance to the current industry of academic health care delivery (the book by Anthony and Young5 was the primary source for the definitions of these economic terms and concepts). It also seemed appropriate to include a number of related quotations.
However, I must begin with a caveat. I have learned that the economic terms listed or alluded to below often have more than one meaning. Many of these terms have quite formalized definitions in the context of doctoral programs in economics, and so some readers may scoff at some of my definitions, arguing that they are little more than the hollow misinterpretations and misrepresentations of a novice in the modern academic health care leadership arena. But many of these terms also have more informal, practical meanings. The definitions below are the ones that I often hear tossed about in meetings of those who actually lead AHDCs in the real world of 1999. I do hope that most readers will find my renderings less than offensive, and perhaps even a bit useful and entertaining as well.
The following format is used: bolded roman font indicates the fundamental economic or management terms, concepts, and principles that are presented in a serious vein. Bolded italic font indicates the less than academically pure aphorisms and quotations that are presented for their lighter, but nonetheless informative qualities.
Academic health care delivery centers (AHDCs) (syn, academic health care centers or academic medical centers): Medical care delivery arenas (eg, inpatient and outpatient hospital services) that exist within a symbiotic association of medical schools, nursing schools, pharmacy schools, and schools of allied health. (Some would argue that such associations, when imbalanced, take on parasitic properties.) It is highly likely that AHDCs, having the unique property of offering multidisciplinary medical expertise, will play an important role in the evolving health care delivery system of the future.4 This will occur as AHDCs define the standards of quality in disease management and illness prevention in the era that follows the demise of managed care organizations as we know them today.
Accounting assumptions: Assumptions made at the outset are absolutely critical to the outcome of an accounting analysis. As in philosophy, "If you accept a man's thesis, you must accept his conclusions."
Accounting: cost vs responsibility (financial): Cost accounting is used to maximize fee-for-service reimbursement. Responsibility (financial) accounting is better equipped to maximize managed care reimbursement.
Actuary: Someone who wanted to be an accountant but couldn't stand the excitement.
Alignment of incentives (syn, goal congruence): The hoped-for productivity gains that occur when physicians, hospitals, and deans' offices work together in pursuit of the same incentives. However, it should be noted that such group interaction is not always best for patients given the alignment of the health maintenance organizations' (HMOs') and physicians' interests in a capitation system using annual percentage-of-salary holdback clauses.
Allocation (apportionment) of costs: Assigning to revenue-generating responsibility centers a portion of the costs of non–revenue-generating service centers (a process that can be viewed as an "accounting shell game" or as "paying your fair share of the costs," depending on one's perspective).
At the end of the day: The net effect of a business strategy once all the variables have played themselves out (a modern synonym for "when all is said and done"). This term is now used so frequently and indiscriminately that a national news magazine recently pronounced it to be trite. I fully concur, but still, like others, find this phrase a bit habit-forming.
Balanced scorecard: Combining several different categories of output measures and linking them to each other.
Basic considerations: (1) Profit (margin)=income (revenues) – expenses (variable+fixed costs) (behold the second law of health care economics: "no margin, no mission"); (2) patients' current view of quality health care is medical expertise+customer-friendly, timely, and cost-conscious care; the traditional physicians' view of quality health care is medical expertise applied without regard to cost or patient convenience; future physicians' view of quality health care is medical expertise+???; (3) "What doesn't kill you makes you stronger."
Benchmarking: The process of comparing an organization's costs and performance against some index of costs and performance across the industry in which the organization competes.
Best practice: An organization that is judged to be the most outstanding in performing a process as deemed by published documentation or personal contact or observation. Also, the idealized process for optimally managing a specific disease.
Buckets to catch costs in: What expense centers (cost centers) are.
Budgetary ploys5: Foot in the door: sell a modest program initially, with the idea of concealing its real magnitude until after it is in place and has built a constituency; hidden ball: conceal the nature of a politically unattractive program by hiding it within an attractive program; divide and conquer: seek approval of a budget request from more than one supervisor; distraction: base a specific request on the premise that an overall program has been approved when this is not in fact the case (difficult, but not impossible, to use successfully); shell game: use statistics to mislead supervisors as to the true state of affairs; it's free: argue that someone else will pay for the project, so the organization might as well approve it; implied top-level support: the budgetee says that, although the request is not something that he is personally enthusiastic about, it is for a program that someone higher up in the organization asked to be included in the budget (preferably this person is more prestigious than, and not well known to, the budgetee's superior; the budgetee hopes that the supervisor will not take the time to bring this third party into the discussion); you're to blame: imply that the supervisor is at fault, and that defects in the budget submission therefore should be overlooked; nothing too good for our people: used, whether warranted or not, to justify items for the personal comfort and safety of military personnel, for new cemeteries, new hospital equipment, research laboratory equipment (especially computers), and various facilities in public schools and colleges; if we don't, someone else will: appeal to people's innate desire to be at least as good as the competition.
Budget tools: A euphemism for those delicate, axe-like instruments used in cutting costs out of an organization (eg, layoffs, early retirement programs, staff reductions through attrition, elimination of entire divisions and programs).
Buy-in: The willingness of one party to accept and actively support the premise of another party in a business arrangement. A gain-sharing arrangement would be one mechanism to get hospital employee buy-in to a continuous quality improvement program designed to cut hospital costs.
Canary in the mine: The disappearance of the canary's song was used in the past by miners as a danger signal to indicate the accumulation of unhealthy levels of gases in a mine. In the health care economics sense, this phrase is often used to refer to that first indicator that an economic or management strategy might be failing.
Cash cow: In the traditional school of economics sense, this term refers to the component(s) of an organization that is bringing in profit that can be used to support other unprofitable but necessary components of the organization. In modern AHDCs, this term is often used to refer to the highest revenue producers within an organization (eg, cardiothoracic surgeons, neurosurgeons, Mohs chemosurgeons). However, because of the high costs (eg, salary levels) often required to placate the cash cows in this setting, the net value to the AHDC might be no greater than that produced by lower revenue producers. Thus, not all that might be called a cash cow necessarily is.
Ceteris paribus assumptions: "All things being equal" assumptions.
Clinical champion: That one sterling physician who can lead change from within an organization because of the respect her/his integrity and clinical expertise commands.
Chief Executive Officers (CEOs) under pressure revert to doing what got them there: Meaning is self-evident. Perhaps this is why I am writing this somewhat inane piece rather than working on the departmental budget, reorganizing the outpatient clinic, filling out promotion papers, hiring new faculty, hiring lab personnel, ordering lab equipment, unpacking lab equipment and supplies, ordering departmental computer equipment, establishing a departmental newsletter, designing a faculty incentive program, taking a more active role in committees that I serve on, taking more of a stand in general, adding another clinic to my weekly schedule, rewriting 2 manuscripts, scouring the weekly scientific literature on Current Contents relevant to immunodermatology, risking a hernia picking up that which is in my inbox, setting up research projects for medical students who want to become dermatologists, trying to prevent key faculty in my department from leaving for greener pastures, giving more lecture time to my current dermatology residents and medical students, working on a National Institutes of Health request for applications to establish a clinical research center, applying for an institutional permit to use experimental animals in my lab, pursuing further endowments for my department, formally evaluating job performance of both junior and senior tenured faculty, organizing an international workshop on the etiology and pathogenesis of photosensitive autoimmune skin diseases, growing the clinical trials division of our department, establishing a multidisciplinary medical dermatology center within our institution, attending journal clubs and research conferences more often, lobbying Congress on behalf of the Medical Dermatology Society and AHDCs, giving something back to my community, getting in shape, working on my backhand and doubles strategy, signing up for ballroom dancing classes with my lovely wife, writing more often to my son in Romania and my daughter in Utah, and getting home for dinner with my wife and youngest daughter prior to 8 PM.
Collateral source offset: A jury takes into consideration the plaintiff's medical insurance and disability insurance cost coverage when determining a malpractice award. This strategy decreases the plaintiff's attorney's contingency fee.
Community equity: The value in the eyes of the community of a particular medical institution. Something that AHDCs need to work on improving actively.
Conflict: People friction. A certain amount within an organization is said to be good for productivity; however, too much can certainly be detrimental. As the Moody Blues once said, "It's a question of balance."
Cost drivers in health care: Factors such as case mix, volume, resources/case, cost/resource unit, and fixed cost base that are the dominant determinants of health care costs.
Cost shifting: Using some of the revenue generated by one responsibility center (eg, a neurosurgeon or an orthopedic surgeon) to support responsibility centers that do not generate as much revenue (eg, a family practitioner or a pediatrician) or that generate no revenue at all (eg, the laundry service of a hospital where the surgeons operate). A practice that most neurosurgeons and orthopedic surgeons would equate with "Taking from Peter to pay Paul."
Continuous Quality Improvement/Total Quality Management (CQI/TQM): Terms used to describe an idealized operational management concept that obsessively emphasizes a systematically applied, quantitative approach of ongoing quality improvement. The success of this approach is absolutely dependent on fervent support by top-level management. Even so, this approach often fails. However, it is an excellent source of employment for consultants and nurses with advanced degrees.
Customers (clients): People or entities who pay you money or the equivalent thereof. External customers are those who exist outside of your organization. Internal customers are those people or entities within your own organization who are either directly (eg, your dean and hospital CEO, through their rank) or indirectly (your faculty, through their productivity) responsible for paying your salary.
Delphi technique: Arrival at a conclusion by several iterations of proposed approaches.
Director and officer policy: Liability insurance coverage beyond that provided by standard malpractice policies that should be carried by leaders within medical organizations such as department chairs/heads if their institution does not fully insulate them from legal action as employees. This type of policy usually has a $50,000 deductible.
Drill down a bit further: Going down one level further in a financial analysis to determine the source of an action or the impact of a particular business strategy.
Early brand loyalty: The first one in a market usually has greater market share when others enter the market. Greater initial market share results in early brand recognition and loyalty, which in turn further increases market share. "The early bird gets most of the worms."
Economies of scale: Ideal economic performance occurs at a certain inherent size of a business operation.
Evolving health care organization (EHO): One view suggests that a new type of horizontally structured, geographically distributed health care delivery system (the EHO) will replace the currently popular vertically integrated health care network as it begins to fail.4 Physician groups will assume full financial risk in such organizations to the benefit of themselves, not the insurance industry, which will be left out in the cold in this scenario.
Figures don't lie but liars figure: With apologies to my accountant friends, opposing assumptions in an accounting analysis (consciously or unconsciously) can be used to support either side of the same argument. Caveat emptor!
Firewall: A barrier erected to prevent spread of economic loss or damage from a failed component within an organization (eg, stop-loss clauses inserted into contracts by insurance carriers).
Every tub on its own bottom: The concept that responsibility centers are completely accountable for their own bottom lines (ie, no cost shifting or cross-subsidization is allowed).
Exam rooms work 40 hours per week but people don't: People chat, take coffee breaks, and eat lunch. Fixed costs such as exam rooms do not.
External environment: The combination of outside economic, social, and political factors in which a business operation finds itself. Just as the climatic environment can change suddenly, the external environment of an industry can change precipitously, wreaking havoc on those organizations whose top-level management cannot recognize and manage change to their benefit. If you were in the hard-copy catalogue business 3 years ago, you should have been seriously thinking about developing an Internet sales division and buying stock in overnight express mail and parcel delivery companies.
Financial committee: A group of individuals within a functional unit who together make decisions concerning changes in levels of pay to the members of that unit. This approach can diffuse the latent hostility that often prevails when such decisions are made by a single supervisory individual.
Flipping burgers: Staff members are working very hard to keep things afloat.
Forcing function: Designing a process so that errors of memory cannot be made. You can't start a car when the gear shift is in "drive." You can't insert a regular gas nozzle into an unleaded gas tank. More such fail-safe systems need to be used in the entire health care delivery system. Entering inpatient orders via a computer programmed to red flag potential medication-induced allergic reactions and adverse drug interactions is such an example.
Funds flow analysis: A funds tracking process used in accrual-based vs cash-based accounting.
Gain sharing: A profit-sharing program including all physicians and staff would be one mechanism by which a hospital could achieve full buy-in for a program of CQI/TQM that is designed to cut hospital costs. The hospital, physicians, and staff could all share in the results of productivity gains that such a quality management program could yield.
Going broke: What is currently beginning to happen to many for-profit managed care organizations that took advantage of a onetime market gain and did not deal with the underlying financial problems of health care delivery.
Herding doctors is like herding cats: Attempting to force a group of independent-minded physicians into an arrangement that they are not comfortable with is likely to prove difficult if not impossible.
Honeymoon period: That altogether too-brief period of leverage that a newly appointed clinical department chair/head has during the "academic honeymoon" that results from the investment that her/his dean has made in her/him. Some feel that this period is increasingly beginning to resemble a true honeymoon in that one might find oneself getting consummated more often than one might like.
If we had some ham, we would have some ham and eggs, if we had some eggs: One should always take care not to leverage one's position to the point of absurdity (borrowed from a good friend, Wayne J. Streilein, MD, 1983).
If you have seen one AHDC, you have seen one AHDC: Local traditions, local politics, and local economic conditions all conspire to make each and every AHDC a unique entity. Thus, like the elusive cure for cancer, no single paradigm of restructuring will work equally well for all AHDCs.
If you take a problem to your boss, also bring him a plausible solution: Meaning self-evident. When your dean speaks, listen! (Borrowed from my current boss, Robert P. Kelch, MD, 1998.)
If you want money, ask for advice; if you want advice, ask for money: A statement that is self-explanatory if you really think about it (borrowed from my former boss, Paul R. Bergstresser, MD, 1984).
In a service industry, you must look for peaks and valleys, not just means and medians: In a service industry, such as medicine today is rapidly becoming, if only 10% to 15% of your clinic patients are waiting 45 minutes or more to be seen, you have a very serious problem on your hands.
In politics, it is much better to be for something than against something: Meaning is self-evident. However, many in AHDCs continue to wail arrogantly about their eroding, once-lofty positions. Opinion polls are said to show that the public doesn't sympathize with those in AHDCs in this regard. We in academic medicine should get our political acts together and take to the people a positive package of health care benefits that can be provided only by the expertise within AHDCs. The people must be made to understand and believe that any threat to the financial viability of their AHDC is a direct threat to the health of each and every man, woman, and child on the street.
Institutional arrogance: Organizations that do not recognize and manage change will fail. Large organizations that resist change may take a longer time to die, but they will die.
Integrated health care system: A consortium of vertically organized health care enterprises sharing a common bottom line that is centered around primary care physicians as the entry point into the system for patients. This consortium is designed in such a way that, once a patient enters the system, all of that patient's health care needs can be met by providers within the system.
Integrated health care systems will fail: Something currently being predicted by some academic health care economists who 5 years ago predicted the demise of the capitated form of for-profit managed care that we are now beginning to witness.
Internal environment: Elements such as unions, local politics, leadership styles, and organizational consciousness that constitute the internal milieu or character of an organization. Like the external environment, the internal environment of an organization must be considered during the process of strategic planning and organizational design.
It's all about money and space: A reference to the 2 final arbiters of internal power in an AHDC.
Let's cut the price by 5% and make up the difference in volume: A fatal, long-term business strategy unless costs can be significantly cut concurrently with the price.
Leverage: If an organization has no debt, its total assets would equal its equity (leverage 1.0). As it begins to rely on debt to finance more assets, its leverage increases. Leverage allows an organization to finance more assets than would be possible if it relied on its equity alone.
Liberalism is about where you start; conservatism is about where you finish: Differing political views that can profoundly affect how one thinks about a health care delivery system.
Like rearranging deck chairs on the Titanic: That futile attempt to keep busy when anything you do will not change the fact that you are dead in the water.
Loss leader: When a product is not covering its full costs (as opposed to a cash cow).
Make-vs-buy decision: A type of accounting analysis where the object is to decide whether it makes more economic sense to outsource something as opposed to doing it in-house.
Malpractice litigation will bankrupt HMOs as we currently know them within 3 to 4 years: Something recently predicted by one academic physician-lawyer that is sure to put a smile on the faces of many working physicians out there in the trenches.
MBA: Some use this abbreviation in its traditional sense to refer to the master of business administration degree. Others use it to refer to the management style of some MBAs—"manage by arrogance."
Medical Group Management Association (MGMA): A source of vast amounts of information related to the business and politics of group practice health care delivery. Their Internet address is http://www.mgma.com/.
MedModel: One of a series of commercially available personal computer software packages that can be used to simulate patient flow through an outpatient clinic. This allows one the ability to adjust variables that produce bottlenecks within the clinic to identify more efficient outpatient management strategies. Elimination of variation is the key to smoothing out the flow of a clinic. Information about and a downloadable demonstration version of MedModel, a product of ProModel Inc (San Antonio, Tex), is available at the following Internet address: http://www.medmodel.com/ (I have no personal financial interests in this product; there are other reputable products on the market that can be used for the same purpose). It should be noted that software packages such as these can require a serious commitment of time during their setup phase.
"My accountant is a genius" syndrome: Since clinician leaders so often see accounting as a black box with which they have little personal experience, they are often overly impressed with the spreadsheet machinations that their administrators frequently provide them. However, as mentioned above, accounting is not as precise a science as many would believe. Accounting outcomes are highly dependent on accounting assumptions.
Net present value: $100 in the future is never equal to $100 in the present. Calculation of net present value is an attempt to quantify in a financial analysis the future effects of inflation on a proposed business activity.
Never take a risk you cannot control: Example: if the volume of patients or cases to be seen is not fixed in a financial arrangement, the provider is assuming considerable financial risk.
New organizational strategies often require new organizational designs: As external environments change (consumer tastes, needs, and requirements), businesses must change accordingly. Such changes in business strategy can require a fundamental reorganization of business operations.
No margin, no mission: Basic law No. 2 of health care economics. No matter how noble the goals of an organization are (eg, unlimited, high-quality health care for all), progress toward those goals is not possible unless an organization makes some degree of margin (profit) annually to counter the withering effects of inflation.
Not expected to make bricks without straw: Departmental chairs/heads are not expected to make miracles; they require some degree of resource investment to make something happen (some would hold that not every dean would fully agree with this concept).
Operations management: The mechanism responsible for maximizing output for a given level of input. As football games are won by blocking and tackling, attention to the details of operational management makes businesses successful. Some maintain that strategic planning is 10% of the successful business enterprise while operations management is 90%.
Outsourcing: An attempt to cut costs by sending components of work outside of an organization (eg, labor costs can be reduced in this way by eliminating the burden of paying fringe benefits).
Patterns of organizational structure: Vertical design: traditional organization of an AHDC where the functions of clinical care, research, and teaching are carried out within the framework of a discipline-specific departmental (silo) setting. In vertically designed organizations, individuals within a department report only to the department head; Horizontal design: teams of individuals having different skills come together to provide an integrated service (or program). In such an organizational design, the members of the team report only to the team leader. Matrix design: a team of individuals from different departments also provides an integrated service; however, the individuals on the team report to 2 bosses, the team leader and the department head. A heart center or a cancer center in a modern AHDC is usually organized in this manner.
Physician work product: Physician services are a function of physician supply; in the setting of physician oversupply, physician work product is better health care and customer satisfaction (reduced waiting times, physician courtesy and empathy, convenient office hours).
Plenty of water in the camel: While not appearing so at the outset, there are always costs that can be cut out of an organization to improve productivity.
Product line vs service line organization: A medical discipline–centered vs a patient-centered organization. The terms product line and service line in this context do not have precise meanings and are often used to reflect more how an organization views itself.
Pull strategy (incentive offering) is always better than push strategy (threat of punishment): A dog cannot be trained to do tricks with punishment alone. However, dogs (even old dogs) can be so trained when a tasty reward is added to the training process.
Quality ("superior" or "excellent" or "expert") health care: The highly abused term quality health care and all its modifiers and synonyms appears to mean different things to different people. As a medical student 3 decades ago, I was taught that the highest quality health care delivery resulted when specific diseases were treated by unbiased, true-hearted, unerring, specialty-trained physicians using the most advanced, cutting-edge medical information and technology without regard to cost or other considerations. To the patient, quality health care has always seemed to be that which is provided by a highly empathetic and caring version of the idealized physician described above who (1) can find the time to talk to her/his patients long enough to answer all their questions and calm their fears, (2) does not make them wait more than 10 minutes to be seen, (3) is always personally available, (4) frequently touches his/her patients and looks them in the eyes, and (5) only sends bills to insurance companies. To those who pay for medical care today from a fixed-budget perspective, such as employers and governments, quality health care seems to be the lowest-cost health care that keeps the workers working and the citizens calm. To many (but not all) modern insurance companies, quality health care seems to be the lowest-cost health care that they can get away with providing. It is time all of these constituencies came together to develop a unified definition of quality health care that each can live (or die) with. Only when this goal is accomplished will any sense of order, harmony, and true humanity return to the rapidly consolidating US health care industry.
Responsibility centers6: A group of people working in an organization toward some specific goal. Responsibility centers can be divided into 4 types depending on the degree of control over costs and revenues that each has. The performance of a revenue center is measured by its ability to generate a predetermined level of revenue (eg, a university development office). In an expense center (cost center), the manager is held accountable for expenses incurred during a given period. In a profit center, the manager has control of revenues and costs and is responsible for generating a profit (profit=revenue-costs). In an investment center, the manager is responsible for both profit and assets used to generate the profit. Responsibility centers can also be subdivided into 2 broad categories: mission centers and service centers. Mission centers contribute directly to the objectives of the organization (eg, a dermatology department), while service centers (eg, housekeeping department) contribute to the work product of the mission centers.
Room at the trough: There is (was) enough for everyone, even the most greedy and porcine among us.
Run rate: Income variance–expense variance ratio of a hospital used as an indicator of its current financial position.
Salary continuation program: Among the most highly effective incentive plans of all.
Shift in the external environment: A change in economic conditions outside an organization can require a reevaluation of organizational strategy and structure.
Silos (or chimneys): A popular analogy currently used by leaders of AHDCs when referring to independently functioning academic departments within such centers. This rather pejorative designation implies that the departments within a traditional, vertically designed organizational structure are counterproductive to progress (ie, better health care and customer satisfaction). It is the general belief among such leaders that disease-based programs that cut across a number of functional units or departments (eg, cancer centers, heart centers) are a more efficient organizational model in the AHDC of today. Such programmatic organizational design undermines the autonomy of departments and department heads, and so tends to be resisted by these entities.
Small problems can have large symbolic value: Nurses on a ward who are asked to accommodate major changes in their work environment (eg, institution of a CQI/TQM program, staff reductions) respond with the complaint that the institution cannot even fix the long-broken clock on the wall in the nursing station.
Smart people anticipate: Meaning is self-evident. A nice variety of crystal balls can be found at http://www.hypnovision.com/occultshop/CrystalBalls.html.
Strategic plan The critical first step in the planning of an organizational structure. After carefully assessing the external environment, top-level management develops a strategy for translating impending external change into profit. This new strategy might well require a fundamental change in organizational structure to accomplish this mission.
TANSTAAFL: Basic law No. 1 of health care economics. The most fundamental business principle of health care delivery is that "There ain't no such thing as a free lunch."
The greatest good for the greatest number vs save all lives at any cost: Divergent ethical-economic views of health care delivery. The US citizenry has as yet been unwilling to deal with this crucial dilemma.
There is nothing constant but change! All existence is a perpetual flux of "being and becoming"! Attributed by G. Seldes6 to Ernst H. Haeckel, The Wonders of Life, 1905.
There is no rank on the flight deck: Thought to be a prime factor in the amazingly low error rate on US aircraft carriers that are run by a crew of high school graduates whose average age is 20 years. Regardless of rank, anyone on the flight deck can scrub a takeoff or landing for any perceived safety concern.
Things tend to spread out to fill available space: Nature (and human beings) cannot tolerate a vacuum.
Transfer rate: The "price" a responsibility center (eg, a dermatology department) pays to a service center (housekeeping) for its services within a university hospital setting. This provides a mechanism of internal accounting to determine the levels of effort expended by service centers over a certain period. To many, such a system would seem to be more equitable than the traditional practice of arbitrarily allocating costs of service centers to responsibility centers, as is done in my AHDC and most other AHDCs with which I am familiar.
Unbundling of services: The practice of isolating progressively smaller units of service for pricing purposes.
Virtually integrated health care system: A multicenter decentralized network that provides standardized disease-management pathways to maximize health benefits and control costs. The physician in such a system will comanage patients with expert computer systems. Some are predicting that this system of health care will succeed when the integrated health care systems now developing fail.4
Volunteer Hospitals Association (VHA): The private coordination center for a large group of community-owned hospitals. Like the MGMA, it can be a valuable resource for data pertaining to academic group practice strategies. The VHA has been chosen to distribute the University of Pennsylvania's practice management guidelines currently being developed. If these standards of medical practice guidelines are half as valuable in cutting costs and improving outcomes as has been initially claimed, they could revolutionize both academic and private forms of health care delivery.
What business(es) are we really in? An absolutely critical question to ask when reassessing organizational strategy and structure. The key issue here is the identification of all customers (ie, people who pay you). Once your external and internal customer base is identified, strategies can be formed to optimally serve all customers. Some of these strategies might necessitate a shift in organizational structure.
What you kill is what you eat: A utilitarian view of health care organization where every responsibility center functions as a tub on its own bottom. That is to say, the organizational unit that you find yourself in (eg, a clinical department) is fully responsible for its own sinking or swimming. This term is the direct antithesis of the concept of cost shifting.
You can't drain the swamp with alligators nipping at your [ankles]: (Bracketed word replaces a deleted expletive in original quotation.) Clinical department chairs/heads are often so busy putting out personnel fires and treading desperately to keep their heads above pools of red ink that they rarely seem to have time to tune up the fire engine or look for new ways to grow the birthday fund.
You can't manage what you have no power over: A clinical department chair/head should not be held accountable for those costs over which she/he has no control. A chair/head has no chance to solve the financial problems faced by her/his department if its indirect costs are allocated on an unfair basis.
You will lose expert MD faculty if they are not allowed to be faculty: Something mentioned by an academic leadership postgraduate course professor that all chairs, deans, hospital CEOs, and executive vice presidents of health affairs should keep in mind as they ratchet down faculty academic time because of economic considerations. Expert academic faculty will always have options elsewhere.
Zero-sum game: In the setting of a fixed set of resources, someone has to lose for someone to gain.
20% to 30% of primary care in the future will be dealt with by Internet services for middle- and upper-income citizens. This will not affect specialists: One prediction heard in an academic leadership course that apparently has some directors of managed care organizations quite concerned.
80% of budgeting is done mechanically, without thinking: Meaning is self-evident.
360-Degree evaluation: A system of performance evaluation that, in addition to conventional employee evaluation by management, includes assessment of a supervisor's performance by those who work under her/him.
It remains to be seen if the lessons that might be gleaned from the foregoing material will sustain me through my first annual budget cycle as a department head. If so, then the adage "You can't teach an old dog new tricks" will have been proven false, and I hope that others might be able to profit in a similar manner from what has been presented above. If not, let me know if anybody out there might be looking for a seasoned vice chairperson/vice head having only a limited (but thoroughly enjoyed) grounding in academic financial and management affairs.
