Managing Health Services Organizations And Systems

[Berk Boyraz]

Managing Health Services Organizations and Systems has served the educational and professional needs of the healthcare field over four decades. The seventh edition furthers that legacy in a completely revised and reorganized text that presents a comprehensive range of the knowledge and skills needed to effectively lead and manage health services delivery.

In this edition, the authors return to basics in a concise yet substantive presentation within a context of quality and performance improvement. New to this edition are chapters on healthcare economics, financial management, planning, organizing, staffing, and directing. A new section on compliance is key to meeting regulatory demands. The sections on patient and staff safety, emergency preparedness, and project management are updated and revised. Additional highlights include

Faculty adopting this text will find exceptional support in the accompanying instructor materials. These include learning objectives, supplemental case studies, discussion questions and answers, PowerPoint presentations, and test banks for each chapter. Also available are PDF files of figures and tables.

Kurt Darr, JD, ScD, LFACHE, is Professor Emeritus of Hospital Administration, and of Health Services Management and Leadership, Department of Health Services Policy and Management, School of Public Health, The George Washington University.

Dr. Darr holds the Doctor of Science from The Johns Hopkins University and the Master of Hospital Administration and Juris Doctor from the University of Minnesota. His baccalaureate degree was awarded by Concordia College, Moorhead, MN.

Dr. Darr completed an administrative residency at the Rochester (MN) Methodist Hospital and subsequently worked as an administrative associate at the Mayo Clinic. After being commissioned in the U.S. Navy during the Vietnam War, he served in administrative and educational assignments at St. Albans Naval Hospital (NY) and Bethesda Naval Hospital (MD). He completed postdoctoral fellowships with the U.S. Department of Health and Human Services, the World Health Organization, and the Accrediting Commission on Education for Health Services Administration.

Dr. Darr is admitted to practice before the Supreme Court of the state of Minnesota and the Court of Appeals of the District of Columbia. He was a mediator for the Civil Division of the Superior Court of the District of Columbia and has served as a hearing officer for the American Arbitration Association. Dr. Darr is a member of hospital committees on quality improvement and on ethics in the District of Columbia metropolitan area. He is a Life Fellow of the American College of Healthcare Executives.

Michael Nowicki, M.H.A., Ed.D., FACHE, FHFMA, holds an Ed.D. degree in Educational Policy Studies & Evaluation from the University of Kentucky and a master of hospital administration from George Washington University. He is currently a professor of health administration at Texas State University. Board certified in both healthcare management and healthcare financial management, he is a fellow of the American College of Healthcare Executives and the Healthcare Financial Management Association. Dr. Nowicki has held various administrative positions in healthcare organizations around the country. He is a noted speaker and author on healthcare financial management.

A rich array of downloadable materials is available to instructors by request to help with designing their courses when using the 7th edition of MHSOS. All materials are updated from the last edition and more have been added. Among these materials are:

Managed Care is a health care delivery system organized to manage cost, utilization, and quality. Medicaid managed care provides for the delivery of Medicaid health benefits and additional services through contracted arrangements between state Medicaid agencies and managed care organizations (MCOs) that accept a set per member per month (capitation) payment for these services.

By contracting with various types of MCOs to deliver Medicaid program health care services to their beneficiaries, states can reduce Medicaid program costs and better manage utilization of health services. Improvement in health plan performance, health care quality, and outcomes are key objectives of Medicaid managed care.

Some states are implementing a range of initiatives to coordinate and integrate care beyond traditional managed care. These initiatives are focused on improving care for populations with chronic and complex conditions, aligning payment incentives with performance goals, and building in accountability for high quality care.

A management services organization (MSO) is a health care specific administrative and management engine that provides a host of administrative and management functions necessary to be successful in the ever changing healthcare environment.

As risk begins to shift from health plans to providers as part of managed care arrangements, many of the functions and services traditionally owned by health plans, including clinical outcomes, are now more appropriately owned and operated by the health system itself. A MSO is a gateway to helping providers apply a population health lens to their practice with a focus on quality and outcomes, which ultimately, enable the practice to better control overall medical spend.

MSOs, and the functions they provide, come in many shapes and sizes. The governance, structure and functionality of a MSO is unique to the risk bearing entity, such as a health system, IPA (and in California Restricted Knox Keene entities) or medical group it is designed to serve. A risk-bearing entity can design or outsource a MSO for a single function/service or many functions/services depending on their needs.

A detailed analysis is necessary to assess market need, organizational readiness, existing infrastructure (including IT), redeployable resources, current vendor contracts and organizational readiness. Other considerations, such as operating in a multi-payor environment, can add to the complexity and require additional assessment and planning.

Improved quality and cost: A centralized care management office, as part of a MSO, standardizes care management delivery across the enterprise. Member identification, risk stratification, attribution, care management delivery, care management staffing and population health reporting and analytics are all streamlined with a common governance structure. Centralized performance improvement and quality improvement enables consistent evaluation and course correction across the network. A MSO providing these services is positioned to realize a true opportunity to improve utilization.

Economies of scale: Centralization of administrative and management functions across an enterprise increases efficiency and standardizes services while creating an economy of scale on a per member, per month (PMPM) basis. By creating economies of scale, a MSO incentivizes the health system to seek partnerships that will increase membership and reduce PMPM administration costs.

Incentive for network expansion: For health systems interested in expanding their provider network, a MSO can be an incentive to attract potential partners. A robust MSO is market-attractive as it enables the provider to focus on providing quality clinical care without the burden of administrative and management functions.

Multi-payor managed care arrangements: Health systems that operate in competitive, multi-payor environments can benefit from moving administrative functions away from the health plan and into a MSO. Owning the administrative and management functions enables greater control over medical spend. Additionally, a payor agnostic and firewalled MSO can provide assurances to managed care organizations (MCOs) during contract negotiations and can help maximize the percent of global risk, including potentially capitation, the risk bearing entity will have access to.

As introduced previously, MSOs centralize the administrative and management functions of health systems or practices to leverage resources efficiently and allow providers to focus on providing quality clinical care to patients. MSOs provide a variety of services that risk bearing entities can buy in totality or piecemeal, based on their sophistication and need for the services and expertise a MSO may provide.

Services typically provided by a MSO can be grouped into three main categories with multiple sub-services within each group, as shown in Image 2 below, 1) Strategic and Administrative Services, 2) Clinical or Operational Program Design and 3) Clinical decision support and Technology Enablement Service.

MSOs are not required to provide a specific set or minimum number of services, however MSOs commonly take responsibility for utilization and care management, financial, actuarial and administrative services (i.e. claims management), information systems support, network development and quality reporting and improvement. Centrally managing or prescribing minimum standards for delegation to partners for services like utilization and care management or the provision of clinical guidelines allows MSOs to standardize services across a health system or other risk bearing entity. This in in turn may enable the risk bearing entity to negotiate for a greater percentage of premium dollars with health plans.

MSOs can be built or may evolve from existing departments or services within a health system, medical group, IPA, Medicare Shared Savings ACO or other risk bearing entity. The decision to build or purchase MSO services should be informed by a larger strategy to gain market share, increase revenue, improve profitability on risk business and/or fill a need for central infrastructure to manage administrative services or population health.

There are several key inputs to understand prior to determining what services to build and which to buy from other MSO providers, including market need and readiness, existing infrastructure available and organizational readiness to scale and provision services to contracted providers. Medical groups, IPAs, health systems and other risk bearing entities in need of MSO services typically issue requests for proposals or information to which MSOs respond and bid to be the provider of services.

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