assignment 3-2

Academy of Strategic Management Journal Volume 15, Number 1, 2016

41

STRUCTURAL COMPARISON OF MANAGEMENT APSECTS OF COMMUNITY HEALTHCARE CENTRES

IN EUROPE WITH SPECIAL FOCUS ON GERMANY

Dr. Fabian Renger, Community Health Center Consulting & Research Dr. Attila Czirfusz, Elisabeth University

ABSTRACT

Advances in pharmaceutical research and increased medical treatments allow individuals on a worldwide scale, especially in the developed countries to have a higher average life expectancy. Although positive individually, sets this phenomenon healthcare systems under enormous pressure to provide affordable and efficient healthcare for citizens in urban and rural areas as well. Beside central steered management undergoing’s in central healthcare systems, decentralized approaches for inter-medical professional cooperation, here Community Healthcare Centers (CHC) promise to be more effective by utilizing systematic network effects. Within this article we try to compare CHC instances within the EU, with a special focus on the German instance of CHC, the MVZ (Medizinisches Versorgungszentrum), which seem to prove the expectancy of a higher individual management effectiveness by fostering the use of dashboards and KPI based scorecards.

INTRODUCTION

The provision of high quality health care at an affordable cost is a major challenge for health care systems all over the world. In many countries, the bulk of annual spending growth is due to increases in the prices of health care goods and services, and the availability of ever more new, often high-cost medical products and treatments. As a result, health care providers are facing ever greater pressure to reduce operational costs without affecting the level and quality of their services (Kaplan & Haas, 2014). In this context, hospitals are of particular interest as they make up the largest cost component in the health care system. Typically, all these health care resources are scarce and so the challenge lies in synchronizing their availability with the needs for care. Taking a broader context, logistics is also concerned with patient flows. Planning, coordinating, and controlling the resources involved in material as well as in patient flows are the functions performed by operations management (OM). Hence, similarly to industrial settings, logistics and OM are also two intertwined areas in a hospital, together, they account for a sizeable portion of a hospital's budget. In the area of information technology, focus has been given to the development of modern hospital information systems (HIS) (Baerwolf, 2010). These systems are designed to deal with all aspects of information processing in a hospital. In particular, they enable the collection, storage, management, and retrieval of data related to the clinical, administrative, and financial aspects of providing services within the hospital.

HEALTHCARE SYSTEMS

In most countries in the European Union, governments are responsible for health policy and legislation (Commission, 2016). Overall the government’s plays supervisory roles among the numerous actors involved in health care, with several functions being shared with or delegated.

Academy of Strategic Management Journal Volume 15, Number 1, 2016

42

General Task, Bodies and Aims

 Insurance provides free access to a package of services; services not included in this package may require

 Upfront payments by patients, or co-payments. Direct payments are also made when using benefits that are

 not covered by the package or that are delivered through physicians not employed by the respective social

 Health insurance fund. Exemptions from co-payment exist for specific categories of patients (chronically ill, below a certain income level, etc.). Provincial authorities are specifically responsible for the implementation of hospital care,

the maintenance of hospital infrastructure, health promotion and prevention services; social welfare benefits and services are the responsibility of local governments (districts, statutory cities and municipalities). Access to health services is not regulated, in that patients are not obliged to enroll with one specific physician and physicians do not play a gate-keeping role. Patients may thus also access outpatient departments of hospitals without referral. Outpatient care is provided through physicians (some self-employed), outpatient clinics, privately owned or belonging to the social health insurance funds, other specialists and outpatient departments of hospitals. Physicians usually have a contract with the social health insurance funds.

Healthcare in the European Union

Different countries in the European Union have different system of healthcare services, examples are as outlined in the following countries diversified by size of members within the healthcare system.

Germany: Example Large Healthcare System

At the central level, the Federal Assembly, the Federal Council and the Federal Ministry of Health are responsible for legislative and supervisory functions. The federal legal framework regulates governance, services to be provided and the funding mechanisms of the health system. Policy-making for health care is shared between the federal government, the counties, and a large number of civil society organizations. These organizations are self-governing bodies representing the various existing sickness funds and the doctors’ associations, i.e. the payers and the providers. The 16 counties are responsible for ensuring hospital care. In particular, the states’ health care responsibilities include hospital planning, hospital financing investments, disease and drug abuse prevention, and vaccination. They are also responsible for medical education and for ensuring public health services such as the prevention of transmissible diseases or environmental hygiene, although these tasks have mostly been delegated to the local level (municipalities). Since 2009, health insurance has been mandatory. Individuals are covered by Statutory Health Insurance (SHI) on the basis of their income (some 88% of the population being covered by SHI) (BAEK, 2013). High earners may choose to be covered by Private Health Insurance (PHI), which also applies to civil servants and the self-employed (some 10% of the population being covered by PHI). Special regimes apply to other categories, such as soldiers and policemen. As at March 2010, insurance was provided by some 169 quasi-public sickness funds for SHI and 46 private insurance companies for PHI, though these numbers continuously change, the market being competitive.

Academy of Strategic Management Journal Volume 15, Number 1, 2016

43

Belgium: A Medium Sized Healthcare System

Health care is determined by three levels of government: the federal government, the federated authorities (three regions and three communities) and, to a minor extent, the local governments (provinces and municipalities) (Eeckloo, 2007). The division of responsibilities for health care reflects the structure of the country as, since the 1980s, some responsibilities have been devolved to the three communities (Flemish, French, and German). The federal level, through the Ministry of Social Affairs and Public Health, is responsible for the regulation and financing of compulsory health insurance, pharmaceutical policy and hospital legislation. Responsibilities of the federated authorities are mainly on ‘health promotion and prevention; maternity and child health care and social services; different aspects of community care; coordination and collaboration in primary health care and palliative care; the implementation of accreditation standards and the determination of additional accreditation criteria; and the financing of hospital investment.

Estonia: A Small Sized Healthcare System

The health care system is administered by the Ministry of Social Affairs. The organizational structure of the system consists of several bodies including, among others: various agencies under the Ministry for Social Affairs; the Estonian Health Insurance Fund (EHIF), as an independent, public legal entity; private primary care units and hospitals established as limited companies or foundations, but mostly owned or controlled through supervisory boards by local governments; and various non-governmental organizations and professional associations. Responsibilities for the financing and management of public health services are at the central level (EU, 2015). The Ministry for Social Affairs, structured into four main departments (Health Care, Public Health, Health Information and Analysis and eHealth), is responsible for health and health care policy formulation, regulation, planning, and monitoring, as well as regulation and funding of ambulance services and emergency care services for uninsured people. The EHIF (Haigekassa) is accountable to the Ministry of Social Affairs through the chair of its Supervisory Board. At county level, county governments, representing the state regionally, are responsible for the planning, supervision and administration of primary care within the county.

Decentralized Private Bodies in EU/Germany

Ownership in hospitals had co-shareholders, been open to governmental entities, not-for profit organizations (in particular church affiliated charities) and private or publicly listed for- profit investors. In order to slowly overcome the internationally strict separation between the inpatient and the outpatient sector and in order to open the latter for investors, a new legal form, the Medizinisches Versorgungszentrum (‘MVZ’) was introduced by the German legislator with effect as of 2004 (MVZ, 2015). MVZ are licensed outpatient medical service providers who may employ physicians and who may be owned by any person or entity entitled to render any (other) services or sell products within the SHI – such as hospitals but also physiotherapist service provider entities, medical appliance shops amongst other things. By 2010, approximately 1,500 MVZ had been established and 20 per cent of them were owned by others than doctors or hospitals. At the end of 2009, the then newly elected government aimed at prohibiting new MVZ being established unless doctors had a majority stake in them. Only hospitals had been envisaged to become an eligible co-owner but it was initially expected that they would be limited to a minority stake.

Academy of Strategic Management Journal Volume 15, Number 1, 2016

44

Management Dimensions of German CHC: MVZ

MVZs run by doctors will only show further clear growth in the individual form of branch MVZs or as an MVZ chain whereas individual MVZs run exclusively by doctors may possess fewer opportunities for influence. It has become clear in recent years from the developments in the healthcare sector that in Germany the MVZ has definitely achieved a certain status.

Figure 1

MEDICAL ACTORS WITHIN AN CHC/MVZ (OWN ILLUSTRATION)

The management of the MVZs varies between the three MVZ categories as follows:

 In the case of a usual MVZ partnership it is necessary for the lead doctor to have sufficient free time to keep up the management within the MVZ.

 In the case of a usual MVZ company limited by shares it is important for the executive director to be able to carry out his management operations to the best of his ability, for example, by working with appropriate tools.

 In the case of an MVZ corporation current management instruments such as, for example, in the case of business management operations, integrated management systems, are centralized for the board or the executive The MVZ partnership has the important goal of offering the best care to patients and

ensuring patient satisfaction with them. In the case of the MVZ Company limited by shares it is of great importance that it is able to fulfill its care responsibility.

CHC Related Business Processes and KPI Scorecards

There are very different approaches to how management is handled within MVZs. Depending on the category of MVZ, management will be based on the staff available and their qualifications and on the structure of the organization.

Academy of Strategic Management Journal Volume 15, Number 1, 2016

45

Figure 2 KPI SCRORECARD AS AN AUXILIARY TO STEER (BAERWOLF, 2010)

Even the legal form (in which the MVZ is established) consequently also affects the MVZ management structure. Taxation factors affecting the MVZ such as, for example, a potential local business tax or value added tax liability have an effect on the way an MVZ is directed, even where such perspectives are only partially expressed. KPI based scorecards as an auxiliary for the related business process can be used to support to steer the organization operationally on figure oriented basis.

Cooperation Instead of Central Steering

Changes to the parameters underlying healthcare – such as, for example, social change, the break-up of traditional social and family networks, demographic developments, the altered range of illnesses, the heightened complexity of care, the limited financial and staffing resources and the changed attitudes of those within the profession and patients towards themselves – mean that new health concepts are necessary, as is an adjustment of the cooperation structures between the different health professions. In economically underdeveloped regions, in particular in the former East Germany, there are also bottlenecks evident in region wide outpatient care by doctors.

CONCLUSION

Community Healthcare Centers, as acting medical entities, positioned within the healthcare domain between an hospital and a doctors single practice seem to be an increased attractive organizational form within the EU, especially within the large healthcare system Germany (Here: the MVZ). Different Subject Matter Experts (SME), in the role of different medical experts, decentralized working in a single legal entity seems to mine special efficiencies based on their relative small structure. Although the management of these entities require a complete end-2-end management of processes, also covered by much larger healthcare entities, like hospitals. A strict operational business management, using current business process supporting IT systems seems to be relevant for the mid-term surviving of these organizations.

Academy of Strategic Management Journal Volume 15, Number 1, 2016

46

OUTLOOK AND FUTURE RESEARCH

Based on the results of the current article it became obvious, that a deeper knowledge is necessary in regards to a better understanding of the multi-dimensional aspects of the pan- European comparison. Therefore additional dimensions have to be included in future research efforts.

 Dimension 1 (D1): Business Process Management (BPM) Level 1-3 In order to understand the in-depth procedures of both, clinical pathways and administrative procedures within a CHC thorough analysis of each single process steps need to be undertaken and modeled in a comparable form, e.g. in a BPMN (Business Process Modeling Notation) (OMG, 2015) process description language.

 Dimension 2 (D2): Key Performance Indicators Comparing structures in regards of effectiveness and efficiency using a standardized, quantitative approach seem to be most plausible. Therefore a set of Key Performance Indicators (KPI), mostly focusing on the General & Administration (G&A) processes, e.g. “Time-to-get-an-appointment” could enhance the impact of the study.

 Dimension 3 (D3): Influence-Matrix to national healthcare regulations Furthermore the impact of the (still very national) specific gestalt of the healthcare system, on the structure of a CHC needs to be enhanced. Factors, like payment scheme, legal-approval status of the facility or maximum, legal approval status for the personnel should be analytical standardized and then be compared in a common matrices based view.

 Dimension 4 (D4): Information-Systems (IS) strategy In regards of efficacy of the facility also the usage of underlying IT infrastructure, how the CHC business process are relying on (cp. To D1 dimension) must be better understood, especially in regards to the D3, the national regulatory procedures. Are they more centrally provided, by a state or region, or, decentrally under the authority of the facility and only data exchange e.g. via the HL7 schema (HL7 Organization, 2016).

REFERENCES

Baerwolf, Sabine. "IT as Sucessfactor in Care Management in a MVZ (DE)." Netzwerk Gesundheit: Vortrag Frau Baerwolff. Polikum Gesundheitszentrum, 13 Dec. 2010. Web. 25 Jan. 2016. <http://de.slideshare.net/sibbev/vortrag-frau-baerwolff6122010>.

BAEK. "Healthcare System." German Association of Doctors (BAEK). Http://www.bundesaerztekammer.de/weitere-sprachen/english/healthcare-system/, 01 Mar. 2013. Web. 25 Jan. 2016. <http://www.bundesaerztekammer.de/weitere-sprachen/english/healthcare-system/>.

Commision, EU. "European CommissionPublic Health." Policy. European CommissionPublic Health, Feb. 2013. Web. 25 Jan. 2016. <http://ec.europa.eu/health/strategy/policy/index_en.htm>.

Eeckloo, Kristof. "The Belgian Healthcare System." Healthcare Managers and Development Tools for Organisations. Health Management Organisation (HMO), Cyprus, 2007. Web. 25 Jan. 2016. <https://healthmanagement.org/c/hospital/issuearticle/the-belgian-healthcare-system-2>.

EU Commision. "Health Insurance - Estonia for Researchers." EURAXESS Estonia. EURAXESS Research in Motion, 2015. Web. 25 Jan. 2016. <http://euraxess.ee/incoming-researchers/health/health-insurance/>.

HL7 Organisation. "Introduction to HL7 Standards." Introduction to HL7 Standards. Health Level Seven International, 2016. Web. 25 Jan. 2016.

OMG Group. "Documents Associated with Business Process Model and Notation™ (BPMN™) Version 2.0." BPMN 2.0. Object Management Group, 2015. Web. 25 Jan. 2016.

Kaplan, Robert, and Derek Haas. "How Not to Cut Health Care Costs." Harvard Business Review. Harvard Business Review, Dec. 2014. Web. 01 Jan. 2016. <https://hbr.org/2014/11/how-not-to-cut-health-care-costs>.

Academy of Strategic Management Journal Volume 15, Number 1, 2016

47

"MVZ." MVZ Structure. Wikimedia Foundation, 17 Aug. 2015. Web. 25 Jan. 2016. <https://de.wikipedia.org/wiki/Medizinisches_Versorgungszentrum>.

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.