John E. Kralewski

Assessing the Influence of Incentives on Physicians and Medical Groups

This article describes issues that should be considered in the development of a theory or theories about incentives from which testable hypotheses could be derived. Economic, psychological, and organizational theories are described, and issues that should be considered in hypothesis generation are presented. Psychological factors influencing incentives include decision framing, regret, heuristics, and reinforcements. Organizational factors influencing incentives include bundling of services or people, matching of incentive structure with work organization, and the incompletely contained hierarchical nesting of incentives. Finally, the dynamics of incentive change are considered, with a focus on describing the conditions under which physicians and physician organizations respond to incentive changes.

Effects of HMOs on the creation of competitive markets for hospital services

Why do health maintenance organizations (HMOs) use particular hospitals, and do they concentrate patients in hospitals where they obtain low prices? We answered these questions with a study of six HMOs in four large metropolitan areas in 1986. A two-part model was estimated for the probability that a hospital would be used and the demand for general inpatient admissions at hospitals that were used. Four staff-network plans in our study do shop for hospital services on the basis of price more than was generally believed. However, two independent practice association (IPAs) plans use more hospitals in the community and do not concentrate patients effectively at hospitals that offer the lowest prices.

How does the culture of medical group practices influence the types of programs used to assure quality of care

Objective: It is widely acknowledged that the culture of medical group practices greatly influences the quality of care, but little is known about how cultures are translated into specific types of programs focused on quality. This study explores this issue by assessing the influence of the organizational culture on these types of programs in medical group practices in the upper Midwest. Design and Methods: Data were obtained from two surveys of medical group practices. The first survey was designed to assess the culture of the practice using a nine-dimension instrument developed previously. The second survey was designed to obtain organizational structure data including the programs identified by the literature as important to the quality of care in medical practices. Completed surveys were obtained from eighty-eight medical groups. The relationship of the group practice culture to structural programs focused on quality of care was analyzed using logistic regression equations. Results: Several interesting patterns emerged. As expected, practices with a strong information culture favor electronic data systems and formal programs that provide comparative or evidence-based data to enhance their clinical practices. However, those with a quality-centered culture appear to prefer patient satisfaction surveys to assess the quality of their care, while practices that are more business-oriented rely on bureaucratic strategies such as benchmarking and physician profiling. Cultures that emphasize the autonomy of physician practice were negatively (but not at a statistically significant level) associated with all the programs studied. Practices with a highly collegial culture appear to rely on informal peer review mechanisms to assure quality rather than any of the structural programs included in this analysis. Conclusion: This study suggests that the types of quality programs that group practices develop differ according to their cultures. Consequently, it is important for practice administrators and medical directors to develop quality assurance programs that fit their cultures if they are to gain buy-in by their clinicians. Future research should assess the effect of culture-structure fit on quality and safety outcomes.

Assessing the culture of medical group practices.

This study was designed to identify the relevant components of the organizational culture of medical group practices and to develop an instrument to measure those cultures. Building on the work of industrial psychologists and organizational sociologists, a 35-item instrument was developed through an iterative process with more than 100 medical groups. The final instrument was tested using responses from physicians practicing in two very different medical groups: one a prepaid group practice with salaried physicians and the other, until recently, a fee-for-service practice. Using stepwise discriminant analysis of the responses to this instrument, more than 90% of the physicians were able to be placed in the appropriate practice setting.

Factors influencing physician use of clinical electronic information technologies after adoption by their medical group practices.

Background: A major factor limiting efficiency and quality gains from clinical information technologies is the lack of full use by the clinicians. Purpose: To identify the practice and physician characteristics that influence the use of e-scripts after adoption. Methods: Data were obtained from 27 primary care medical group practices that had e-script technology for 2 years. Physician and practice characteristics were obtained from the clinics, and the proportion of each physicians prescriptions sent electronically was calculated from the prescription records. Practice culture data were obtained from a survey of the physicians in each practice. Data were analyzed using hierarchal regression. Findings: Practice-level variables explain most of the variance in the use of e-scripts by physicians, although there are significant differences in use among specialties as well. General internists have slightly lower use rates and pediatricians have the highest rates. Larger practices and multispecialty practices have higher use rates, and five practice culture dimensions influence these rates; two have a negative influence and three (organizational trust, adaptive, and a business orientation) have a positive influence. Practice Implications: While previous studies have identified physician characteristics and product deficiencies as factors limiting the use of electronic information technologies in medical practices, our data indicate that the influence of these factors may be highly dependent on the culture of the practice. Consequently, practice administrators can improve physician acceptance and use of these technologies by making sure that there is a culture/technology fit before deciding on a product.

Measuring the culture of medical group practices.

Objective: To develop an instrument that can be used to assess the organizational culture of medical group practices. Data Sources and Study Setting: Study participants were primary care physicians in 267 medical group practices. The iterative process began in Minnesota and then expanded to practices in 21 other states. Data Collection Methods: Practice culture statements were collected using questionnaires distributed at a national medical group practice meeting and mailed questionnaires sent to a broader set of participants identified by the Medical Group Management Association. Study Design: Using a framework developed earlier, physicians in medical groups were asked to react to statements that described the basic assumptions and patterns of behavior characteristic of their practices. An iterative process involving over 500 physicians in 267 practices was used to identify and refine statements. Factor analysis was used to group the statements into cohesive cultural dimensions. Principal Findings: Thirty-nine statements correlated with nine cultural dimensions were identified and a test of this instrument found that it successfully identified differences in the cultures of medical groups. Conclusions: Although there is increasing agreement that the culture of medical group practices is one of the most important factors influencing the cost and quality of care, efforts to understand and manage these cultures have been hampered by the lack of a measurement instrument. This article presents an instrument that has broad face validity in the group practice field and successfully differentiates the cultures of different types of practices.

Structural characteristics of medical group practices.

This study of 247 medical group practices explores the structural characteristics of these emerging organizational forms. As size and complexity of services increase, group practices tend to increase the number of hierarchical levels of authority and become more formal and bureaucratic. Complexity of services was found to have more influence on the formation of subdivisions, while size was more influential in terms of levels of administration. Large group practices, and especially large multispecialty groups, appear to engage in a highly organized corporate style of medical practice. In these organizations, important professional decisions are shifted from the clinician to the administrator.

The influence of the structure and culture of medical group practices on prescription drug errors.

Background:This project was designed to identify the magnitude of prescription drug errors in medical group practices and to explore the influence of the practice structure and culture on those error rates. Seventy-eight practices serving an upper Midwest managed care (Care Plus) plan during 2001 were included in the study. Methods:Using Care Plus claims data, prescription drug error rates were calculated at the enrollee level and then were aggregated to the group practice that each enrollee selected to provide and manage their care. Practice structure and culture data were obtained from surveys of the practices. Data were analyzed using multivariate regression. Results:Both the culture and the structure of these group practices appear to influence prescription drug error rates. Seeing more patients per clinic hour, more prescriptions per patient, and being cared for in a rural clinic were all strongly associated with more errors. Conversely, having a case manager program is strongly related to fewer errors in all of our analyses. The culture of the practices clearly influences error rates, but the findings are mixed. Practices with cohesive cultures have lower error rates but, contrary to our hypothesis, cultures that value physician autonomy and individuality also have lower error rates than those with a more organizational orientation. Our study supports the contention that there are a substantial number of prescription drug errors in the ambulatory care sector. Even by the strictest definition, there were about 13 errors per 100 prescriptions for Care Plus patients in these group practices during 2001. Conclusions:Our study demonstrates that the structure of medical group practices influences prescription drug error rates. In some cases, this appears to be a direct relationship, such as the effects of having a case manager program on fewer drug errors, but in other cases the effect appears to be indirect through the improvement of drug prescribing practices. An important aspect of this study is that it provides insights into the relationships of the structure and culture of medical group practices and prescription drug errors and provides direction for future research. Research focused on the factors influencing the high error rates in rural areas and how the interaction of practice structural and cultural attributes influence error rates would add important insights into our findings. For medical practice directors, our data show that they should focus on patient care coordination to reduce errors.

The Physician Rebellion

Physicians are becoming increasingly concerned about the controls being placed on their practices by health maintenance organizations (HMOs), preferred-provider organizations, third-party insurance...

The effects of capitation payment on the organizational structure of medical group practices.

This study explores the effects of capitation payment on the structural elements used by medical group practices to control physician-directed use of resources and the quality of patient care. Forty-five medical groups located in the highly competitive Minneapolis/St. Paul metropolitan area were studied. The range of capitation payment in these medical group practices is from 2% to 87%. Although the practices vary considerably in the extent to which they have developed these control mechanisms, it does not appear that capitation payment is a major factor influencing that pattern. It appears that many of these medical group practices either use less formal mechanisms than those included in this study to control resource use and the quality of care or use none at all. In either event, the data suggest that the effects of capitation payment on the structure of medical practices may be overestimated.