Article
Dual agency in hospitals: how do managers and physicians reconcile between financial and clinical considerations in Germany and Israel?
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Authors
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Ruth Waitzberg
- Brookdale Institute, Smokler Center for Health Policy Research, Jerusalem, Israel; Ben Gurion University of the Negev, Department of Health Systems Management School of Public Health, Israel; Berlin Institute of Technology, Department of Healthcare Management, Berlin, Deutschland
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Wilm Quentin
- Technische Universitat Berlin, Department of Healthcare Management, Deutschland; European Observatory on Health Systems and Policies, Belgien
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Nora Gottlieb
- Technische Universitat Berlin, Department of Healthcare Management, Deutschland
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Reinhard Busse
- Technische Universitat Berlin, Department of Healthcare Management, Deutschland; European Observatory on Health Systems and Policies, Belgien
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Dan Greenberg
- Ben Gurion University of the Negev, Department of Health Systems Management School of Public Health, Israel
| Published: | September 25, 2020 |
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Outline
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Background and current state of (inter)national research: Which hospital managers, chief physicians/ward directors and physicians face dilemmas due to their role as dual agents, committed both to their hospitals and their patients.
Research questions and objectives: To identify these dilemmas and to explore whether differences exist with regard to how they reconcile economic and clinical considerations in their decision-making in Germany and Israel.
Methods or hypothesis: We used a qualitative, thematic analysis based on 47 semi-structured in-depth interviews with Chief Executive Officers, Chief Financial Officers, clinical managers, chief physicians/ward directors and physicians in five hospitals in Germany and five in Israel, sampled by maximum variation according to hospital characteristics.
Results: In both countries economic and clinical considerations are aligned when gaps between hospital payments and costs are small, and economic incentives do not distort clinical considerations and avoid unnecessary (unpriced) new technologies; or when good medicine avoids complications while saving costs. Managers and chief physicians/ward directors, more than physicians, face dilemmas when procedures are underpriced, resulting in financial losses to the hospital, and represent barriers for adoption of new, costly, medical equipment. In many instances, managers and chief physicians/ward directors choose one of the principals (hospital or patient), yet sometimes they develop reconciliation strategies that include:
- 1.
- improving coding of activities and diagnoses to assure higher payments;
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- reducing costs per case by choosing cheaper supplies with the same quality, bulk purchasing or reducing unnecessary lengths-of-stay;
- 3.
- providing clear treatment guidelines that support decision-making.
Physicians are less involved in creating these strategies, but often adopt them. In addition, hospitals in Germany aim to become more efficient in certain procedures through specialization, and they try to find alternative, less costly, care settings such as rehabilitation facilities or home-care. In Israel, hospitals balance the amount of unprofitable cases with many other profitable cases, increasing revenues to hospitals and shortening waiting times to patients.
Discussion: Hospital managers and physicians face, at times, dilemmas that arise from their dual commitment to both the hospital and the patients, regardless of the amount of funds available in the hospital market. While sometimes one principal prevails, agents in both countries develop reconciliation strategies. In Germany, a high-expenditure hospital market, there is some flexibility to change the character of hospitals activity, while in Israel, a middle-expenditure market, agents balance activities within the existing framework.
Practical implications: he pricing and method of payment to hospital activities should match hospitals costs as much as possible so economic incentives do not distort decision making and do not pose hospital workers in dilemmas.
