This is the translation of my post written on 28th of December, 2011

Trending, Healthcare Management

Our health system and healthcare management are the subjects of many debates. We often talk about the ability of our health system to fulfill our expectations as patients, how much we pay for that system, etc. Politicians discuss the ways to organize the health system, reductions in healthcare costs, their budget share, and so on. Everyone is always talking about reforms.

We can say in general that the health system is in a state of constant reform, the results of which are making all participants chronically displeased. Patients complain about long waiting times, bad treatment and deficiency of medical supplies and equipment at healthcare institutions. Health workers are unsatisfied with their pay, advancement opportunities, the organization in total and the shortage of means of labor. Employers agree that all of that put together amplifies the labor burden, and ask that the salary-based contributions be reduced. Politics is consistent, regardless of the side the ministers are from, that the health system is always and unconditionally in need of a major overhaul, a deep reform. It is always the case that the debts of the predecessors are too high, incorrectly reported, undisclosed and the like. Unions are fighting for the rights of workers in the health sector, and wish to reform the system so that the already limited presence of private entrepreneurship in healthcare is completely halted and exterminated. Expert groups and chambers are each lobbying for their own piece of the healthcare pie.

But in the real world, in the real economy, things are much clearer. And cleaner. Dissatisfaction is a business opportunity. Dissatisfaction gives birth to new things, new products and solutions. Customers unsatisfied with one service switch to another. An exceptional employee unhappy with his or her employer quickly makes the move to a competitor. Top-notch employers undertake all sorts of efforts in order to attract outstanding candidates or snatch them away from competition. Look how Google attracts and retains its employees:

Does anyone still use Yahoo or Bing? Customers and workers, bringing along revenue and profits, have crossed over to better players. But none of that is possible in our health system.

Our health system, like the largest part of our country, is immobilized. Professor Bićanić has ascertained in his recent study that this overall immobility represents the prime obstacle to the development of our society as a whole.

It all starts from the shortcomings in the management of the health system. From the fragmented and disconnected hospitals, with countless clinics and departments. In most cases completely isolated, both IT-wise and organizationally. Hospital directors complain to HZZO (Croatian Institute for Health Insurance) that they can’t do anything to singular despots in their institutions. So then HZZO is forced to pay for expensive medicines and procedures, because individuals at lower levels are opposing the greater vision and the objectives that were set. The most promising health minister to date didn’t succeed in the unification of hospitals. Those that appear unified are in fact not yet functioning properly by themselves, nor are their statuses fully resolved in the court registries.

Resources are not being used efficiently. Waiting lists are long, while expensive diagnostic equipment stands idle. It’s only running during one shift, or it’s out of order. The dreadful system of payments, which combines a limited monthly amount with the billing of services at unrealistic prices, is making the water murky. And in murky waters…

Often some of these expensive systems are intentionally kept underutilized because they create losses for the hospitals. Which in turn further extends the waiting lists. A kind of “creative invoicing” emerges, where everyone is playing around with numbers, without real fundamentals, so that they could reach their monthly limits. Because if they don’t, they won’t have enough to pay out salaries. The salaries that are guaranteed by the collective agreement. Unions are powerful and start roaring in an instant, mind you. All of that is implicitly being tolerated. More or less. Because it’s all ours, it’s public. No harm done.

That is why the entry of private hospitals into the system is being obstructed. Because they can’t be given the same terms. We can’t allow creative accounting to “private sector businessmen”. They are not ours. They are theirs. And favoring one’s own is against the law. That would be big harm done J If they were given the same conditions as public hospitals, it would follow that much more can be done with the same amount of money. Because they wouldn’t have 40 lawyers, like some of our large hospitals. Medical rooms and equipment would be available and operational throughout 3 shifts, employees would be working overtime. They would receive higher salaries than their colleagues in public hospitals. Only some would stay. Maybe even some of the hotshots, who don’t want to make the transition to the private sector right now, not even at the invitation of a friend of mine, also a private entrepreneur, because they have so much business “on the side” that he can’t even come close. At the same time the private side is being stigmatized. I personally bear witness. I am certainly not an advocate of the American or the British model of the health system, but people, we can’t go on like this anymore. The sooner we realize that, the better.

Hospitals sometimes don’t accept external test results, so instead the tests are repeated. Hospital information systems (HIS) are not standardized. They are not connected with the Central Healthcare Information System. The E-Recept (E-Prescription) system is working mostly because there are pharmacies on the other end, IT-enabled and well organized. It is in their interest that the E-Recept system endures. They are not obstructing it. If they did, HZZO would already be all over them. Because it can. For that same reason the E-Uputnica (E-Referral) system is not working. Because it is much harder for HZZO and the Ministry of Health to put pressure on the hospitals. And the hospitals are not really that keen on opening up all their operations for everyone to see in real time. Dentistry and family physicians are grouped into integrated systems, but hospitals are not. Apparently, they won’t be any time soon. There are even hospital information systems by the same producer that differ from hospital to hospital. Information relevant to the management is often unreliable. That is the kind of information that gets collected by HZZO and HZJZ (Croatian Institute for Public Health). There it is processed, and in larger part used to manage the health system.

That’s as if you were navigating a tanker with positioning data several hours old, blindfolded, solely on the basis of the sounds you hear. A first-class captain you may be, but with that kind of data it is hard to accomplish your task. As a member of the Management Board at HZZO, it made me very happy when we received some reports on a quarterly schedule instead of every six months.

Therein is the real challenge. For the owner and the managers. But they need the right tools too. Hospitals have to have systems that can provide all management levels with real time data. That data has to be aggregated and directly forwarded to headquarters, HZZO, HZJZ and the Ministry of Health. Automated alerts and defined procedures have to be in place.

So then, in the real world which operates under different principles and rules of the real economy, the owner and the manager would sit down, set objectives and start cleaning up the mess and working. They would introduce an interlinked information reporting system, and get the operating timeline in order. Already from the first or the second lap time they would be able to find out if the manager can execute the plan, and the owner would quickly decide whether to change the manager or revise the plan. If he delayed the decision, if he hesitated, the ship would sink, the manager would be looking for another job, and the owner would lose everything and go bust. Others would take their place, the ones who know better, who can do more, who don’t procrastinate in decision-making and are able to deliver a better service at a lower cost.

Aren’t we all doing things this way today? There is constant pressure for changes that lead to efficiency and rationalization. Those who can follow the pace carry on; those who can’t either fail or try to find some nook, some niche that hasn’t been fully overtaken by the wave of changes.

According to the data from the Association of Healthcare Employers, out of all directors in 61 public hospitals, 49 of them are Doctors of Medicine. 5 are economists, 3 are lawyers and the rest are other professions. As per article 59 of the Health Protection Act, a hospital director has to have a degree in medicine, and in special cases, if he or she doesn’t, the assistant has to comply with that requirement. Formally the director is appointed by the Management Board on the basis of an assessment procedure, but in reality the choice of directors of the most important public institutions is under considerable influence of politics.

Systematic education that would teach the fundamental principles of management with an emphasis on specific aspects of healthcare management is neglected. Graduate healthcare management programs are marginalized. The criteria on which a hospital director is being decided upon are very loose, and some institutions don’t even have them worked out in their statutes in sufficient detail. What would they need them for? That only makes it possible for someone vengeful to complain about the selection process. The local sheriff knows whom he wants in his hospital. And through his local administration that sheriff nominates the Management Board. So go on and apply for the position, my dear future director.

The legal constraint itself isn’t up to modern times. The health system needs managers who will know, dare and want to turn the trend around. Their professional background is of no importance. Economists will never represent parties in court. Lawyers do that. Lawyers will never perform an operation on a patient or examine him. Doctors do that. Should the requirement for the position of the Management Board president of TDR (Rovinj Tobacco Factory) be a diploma in Agronomy and 5 years of industry experience? Does Podravka have to be run by a Food Technology engineer? If also a professor at PBF (Faculty of Food Technology and Biotechnology at the University of Zagreb), does he or she need to spend a part of the working day there as well? And travel around the world, participating in various congresses on the cultivation of premium tobacco sorts or new food preservation methods? Simultaneously devoting some time to a tobacco or paprika field of their own – to stay in the game? Many hospital directors still work part time in dispensaries, handle their patients, some even perform an operation from time to time to keep their skills sharp. They visit congresses related to their main profession, which are less concerned with management of large systems. And that’s OK. Take my example: I too am writing a blog. No, I’m not a journalist. I am a director of an SME. And I invest some money here and there. I took a course for an investment advisor, but didn’t pass it. Which obviously makes me incompetent. Recent results confirm that 🙂 But I am doing all of that in my free time. Which, generally, I don’t have.

Does a national airline company necessarily have to be run by a pilot? A pilot is often too expensive for that. Flight hours and licenses cost too much. It would be a waste to put a pilot in that position, but should he so desire, there is no obstacle. I don’t have a problem if hospital directors made a lot more money than today. On the contrary. With accountability for errors. With their personal property if need be. And with full, undivided attention solely on their directorial obligations. During working time. Set to 10 hours minimum. Because that’s what the job requires. And I also don’t mind if a top surgeon made more than a director. Because he’s a top surgeon.

Management of large systems is a difficult job. If we look at the stage our hospitals are in today financially and organizationally, and also consider their level of equipment and personnel, it becomes clear that it’s a strenuous, backbreaking job. A job for crisis management. For the best and the brightest of crisis management experts. Who are they? Don’t ask me, I’m certainly not one, but it seems that many of the contenders so far aren’t either.