A C A D E M I C H E A LT H G R O U P

The Blue RidgeThe Blue Ridge

Report 6

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

A Four-Point Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Mission Renewal and Realignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Aligning with Societal Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Recommendation and Action Steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Organizational Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Reform with Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Barriers to Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Change in Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Change in Clinical Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Change in Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Recommendation and Action Steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Enabling Knowledge Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Optimizing Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Clarifying Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Measuring Quality and Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Bringing Good Things to Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Recommendations and Action Steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Overcoming Cultural Barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Developing New Archetypes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Leadership Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Recommendations and Action Steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

About the Blue Ridge Academic Health Group . . . . . . . . . . . . . . . . . . . . . . . . .39

About the Core Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

About the Invited Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

Appendix: Baylor Metrics 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54

Reproductions of this document may be made with the written permission of the University of Virginia HealthSystem by contacting Elaine Steen, University of Virginia Health System, Box 800413, Charlottesville, VA 22908Email: ebs9g@virginia.edu

Creating a Value-driven Culture and Organization in the Academic Health Center is the sixth in a series of reportsby the Blue Ridge Academic Health Group. The recommendations and opinions expressed in this reportrepresent those of the Blue Ridge Academic Health Group and are not official opinions of the University ofVirginia. This report is not intended to be relied upon as a substitute for specific legal or business advice.

For questions about this report, contact: Don E. Detmer, M.D., University of Virginia, Phone: (434) 924-0198 Email: ded2x@virginia.edu

Copyright 2001 by the Rector and Visitors of the University of Virginia

The Blue RidgeAcademic Health Group

Report 6

Creating a Value-drivenCulture and Organization inthe Academic Health Center

The Blue Ridge Academic Health Group

Mission

The Blue Ridge Academic Health

Group seeks to take a societal view

of health and health care needs

and to identify recommendations

for academic health centers

(AHCs) to help create greater

value for society. The Blue Ridge

Group also recommends public

policies to enable AHCs to accom-

plish these ends.

Members

David Blumenthal, M.D., Professor ofMedicine and Health Care Policy, HarvardMedical School; Director, Institute forHealth Policy, The Massachusetts GeneralHospital

Enriqueta C. Bond, Ph.D., President,Burroughs Wellcome Fund

Robert W. Cantrell, M.D., Vice Presidentand Provost (until July 2001), Director,Virginia Health Policy Center, University ofVirginia Health System

Don E. Detmer, M.D., Dennis GillingsProfessor of Health Management, JudgeInstitute of Management Studies, Universityof Cambridge*

Michael A. Geheb, M.D., Senior VicePresident for Clinical Programs, OregonHealth Sciences University

Jeff C. Goldsmith, Ph.D., President, HealthFutures, Inc.

Michael M.E. Johns, M.D., Executive VicePresident for Health Affairs, Director, theRobert W. Woodruff Health Sciences Center,Emory University

Peter O. Kohler, M.D., President, OregonHealth Sciences University

Edward D. Miller, Jr., M.D., Dean and ChiefExecutive Officer, Johns Hopkins Medicine,The Johns Hopkins University

Jeffrey Otten, M.A., M.B.A., President,Brigham & Women’s Hospital

Mark Penkhus, M.H.A., M.B.A., ExecutiveDirector and Chief Executive Officer,Vanderbilt University Hospital

Paul L. Ruflin, M.B.A., Vice President,Cap Gemini Ernst & Young U.S., LLC

George F. Sheldon, M.D., Chairman andProfessor, Department of Surgery, School ofMedicine, University of North Carolina atChapel Hill (until September 1, 2001);Scholar in Residence, Burroughs WellcomeFund

Katherine W. Vestal, Ph.D., Vice President,Cap Gemini Ernst & Young U.S., LLC

Invited Participants

Haile T. Debas, M.D., Dean, School ofMedicine, Vice Chancellor for MedicalAffairs, University of California, San Francisco

Tipton Ford, Senior Manager, Cap GeminiErnst & Young, U.S., LLC

Arthur Garson, Jr., M.D., M.P.H., Senior VicePresident and Dean for AcademicOperations, Baylor College of Medicine

John Lynch, Vice President, Global HumanResources, GE Medical Systems, GeneralElectric Company

Staff

Cap Gemini Ernst & Young U.S., LLCJacqueline Lutz, Associate Director

University of VirginiaCharlotte Ott, Senior Executive AssistantJon Saxton, J.D., Policy Analyst**Elaine Steen, M.A., Policy Analyst

Founders

The University of Virginia and Cap GeminiErnst & Young, U.S. LLC founded the BlueRidge Academic Health Group in 1997.

*Chair**Editor

2

Introduction

What is new and significant mustalways be connected with old roots,the truly vital roots that are chosenwith great care from the ones thatmerely survive.

– Béla Bartók, Composer

A Four-Point Agenda

The academic physician, academic med-icine, and the health professions in generalare in the midst of an extended period oforganizational and professional turbu-lence. Beginning with the explosivegrowth of managed care in the 1980s, therelatively closed, professionally self-regu-lated health services sector has beenpushed into a more classically competitivemarketplace (Blue Ridge Academic HealthGroup, 1998b). The 1990s brought addi-tional impetus for change with shiftingpublic policy, changing demographics,increasing consumerism, and the growinginfluence of information technologies(Blue Ridge Academic Health Group,2000a and 2001). Now, at the turn of the new century, there is renewed public

concern with deficiencies and inconsis-tencies in the quality of health care delivery services.

The health care sector is clearly laboringunder the strains of this changing anddemanding environment. The new market-place is squeezing the financial resourcesand compensation available to healthproviders and organizations. Societalneeds, expectations, and aspirations for thehealth care system have changed and aregrowing. Academic health centers (AHCs),in particular, continue to face great chal-lenges in adapting their multiple serviceand academic missions to changing socie-tal, financial, and service requirements.

AHCs have adopted measures to improveservice, cut costs, and increase productivity.They are learning how to do more withless. They have also worked to developnew capabilities and revenue streams in anattempt to shore-up strained academic andclinical resources. These efforts increasethe service and performance expectationsfor faculty and staff who find it increasing-ly difficult to pursue research and teachinggoals. In almost every aspect of the chang-ing health care environment, strategies forcompetitiveness and fiscal discipline havebeen in contest with long-established

The Blue Ridge Academic Health Group

The Blue Ridge Academic Health Group (Blue Ridge Group)studies and reports on issues of fundamental importance toimproving our health care system and to enhancing theability of the academic health center (AHC) to sustain optimal progress in health and health care through soundresearch – both basic and applied – and health professionseducation. Five previous reports have described opportuni-ties to improve AHC performance in a changed health careenvironment and to leverage AHC resources in achievingthreshold improvements in health system access, quality,and cost. The Blue Ridge Group has provided guidance onimproving management, strengthening financial perform-ance, enhancing leadership, developing knowledge man-agement and Internet-based capabilities, and developing amore rational, comprehensive, and affordable health caresystem (Blue Ridge Academic Health Group 1998a; 1998b;2000a; 2000b; 2001). In this, its sixth report, the BlueRidge Group considers the need for academic health centers to address the cultural and organizational barriersto professional, staff, and institutional success in a value-driven health system.

organizational structures, processes,norms, values, and traditions of the healthprofessions. The ensuing conflicts havebeen difficult to manage. As a result, AHCsare experiencing significant internal turmoil. Faculty morale and loyalty to theacademic institution are being affected.Traditional AHC organizational structuresand management solutions are fast becoming insufficient, if not obsolete.

In the face of this difficult environment,AHCs must address cultural and organiza-tional barriers to professional and institu-tional success in the health system of the21st century. They must update their missions and organizations and adopt newapproaches to supporting and motivatingtheir staff. To do so, the Blue Ridge Groupbelieves that AHCs must pursue a four-point agenda:

• Mission Renewal and Realignment – AHCs must renew and, where necessary, realign their goals, values, and missions to meet societal needs and aspirations.

• Organizational Innovation – AHCs must restructure and realign their organizations to enable optimal performance and support updated missions and goals.

• Personnel Management – AHCs also must adopt new human resources and management systems necessary to support today’s knowledge workers.

• Cultural Reform – AHCs and the health professions together must address and realign some important aspects of traditional academic and professional culture.

3

4

Exhibit 1: Recommendations

Mission Renewal and Realignment• AHCs, organized medicine, and the health professionsshould renew and, where necessary, realign their goals, values, and missions to better address societal needs andaspirations for our health care system.

Organizational Innovation• AHCs should develop and implement organizational innovations and programs that enable faculty and staff toachieve societal health care needs and to create a value-driven health care system.

Enabling Knowledge Workers• To enhance value-creation, motivate performance, andimprove quality and outcomes, AHCs must develop a newunderstanding of knowledge workers and the types of orga-nizational systems and processes required to manage andlead them. AHCs should commit to ongoing leadership, professional, and staff development as an integral part ofeach mission.

• AHCs should develop new and improved human resourcecapabilities that enable routine performance appraisals, iden-tification of new talent, cultivation of skills, and mentoring offaculty and staff.

Overcoming Cultural Barriers• AHCs and health professional organizations should actively work to reform their cultures and archetypes ofdesirable behavior.

• AHCs should supplement the culture of the independentinvestigator with a culture that supports demonstrated abilityto establish and be a significant contributor to, or leader of,fruitful and meaningful collaborations and teams.

• AHCs should supplant the traditional ideal of the “triplethreat” with one that emphasizes:

• Excellence in scholarship and/or achievement in one ormore of the core academic mission areas: student-cen-tered education, discovery-centered research, or care-centered research or innovation.

• Excellence in achievement and/or leadership in the coreservice mission: patient-centered care.

• Excellence in achievement and/or leadership in commu-nity, professional, and institutional service in measurablymeeting societal needs and aspirations for our health caresystem.

• AHCs should replace the archetype of the ego-centric,authoritarian, or otherwise organizationally dysfunctional personality and pursue creation of a new cultural standardthat values the stellar, brilliant individual with a strong personality who leads collective change, inspires confidence,and motivates performance among peers, other knowledgeworkers, and staff.

5

Aligning with SocietalNeeds

For more than half a century, AHCs andthe medical profession have provided vitalroots of leadership in the progress ofhealth care, in biomedical and behavioralscience, in the education of health profes-sionals and scientists, and in service tothe community. Yet the intense focus onhospital-based research, training, andcare, combined with proliferating technol-ogy, resulted in a very expensive systemthat was not meeting important healthneeds of millions of citizens. Despitemany impressive achievements, signifi-cant flaws and inequities still exist in safe-ty, quality, cost, and access. At the end ofthe 20th century, more than 40 millionAmericans lacked health insurance.Access to and quality of health care variedwidely across regions, populations, andlocalities. The health of the population, asmeasured by variables such as lifeexpectancy and infant mortality, lagbehind most industrialized countries(Rice, 1994). Two recent reports from theInstitute of Medicine (IOM) identified sig-nificant problems with patient safety andthe quality and consistency of health caredelivery (IOM, 1999 and 2001).

The Balanced Budget Act of 1997, strip-ping more than $100 billion in paymentsand subsidies out of the health care sys-tem over five years, was a watershed eventin public policy towards health careproviders and the rising costs of healthcare. The fact that some monies haverecently been restored does not changethe basic picture. It is increasingly diffi-cult to maintain public sympathy oversuch issues as reduced reimbursements,

declining revenues, and increased admin-istrative and regulatory burdens, whenheadlines focus on issues relating to prob-lems with clinical trials, lapses in medicalrecord security, or any other performance problems.

Despite the intrusion of market forcesinto the health sector, there is still anunderstanding that health care is a specialservice. Not only do health care servicesdepend on trust between the patient andhealth professional, but they also generatea public good in the form of a healthy,productive society. AHCs are beneficiariesof substantial public investment and theyplay a unique role in the nation’s healthinfrastructure. They have a particularresponsibility to assure that they under-stand and are meeting the public’s needs.

AHCs and the health professions must askwhether their missions, values, and goalsare well aligned with those of society. TheIOM has provided indispensable guidancefor mission realignment and for movingtowards the type of value-driven healthsystem that the Blue Ridge Group advo-cates (see Exhibit 2) (Blue RidgeAcademic Health Group, 1998b).

The real cure can come only out of changes in national policy and priorities when the American publichas had enough of this uncontrolledchaos we call our health care system.

– Halie Debas,M.D.,Dean UCSF

Mission Renewal and Realignment

6

In its report, Crossing the Quality Chasm:A New Health System for the 21st Century,the IOM surveyed the broader landscapeof quality issues in health care and founda large gap between the promise and therealities of the health care system (IOM,2001). Describing the last quarter of the20th century as the “era of Brownianmotion in health care,” the report sug-gests that this tumultuous period of“mergers, acquisitions and affiliations”has produced a great deal of organization-al turmoil but little in the way of signifi-cant or lasting improvements in either thequality of health care or in the health status and outcomes for the population. A central message is that care delivery inthe future must be constructed on threepillars: scientific evidence, well-designedsystems, and patient-centered care.

One of the most important findings is thatour existing systems of care are inade-quate given the complexity of modernhealth care and the growth in the healthsciences knowledge base. Health profes-sionals cannot provide high quality carein a delivery system with deficientprocesses, inadequate information sys-tems, and unmanaged change to the pointof turmoil. In a manner akin to many ofour past recommendations, the IOMdescribed our health system as lackingclarity of purpose, commonality of inter-ests, and the shared values necessary toguide the various constituents of thehealth care system – from patients tohealth professionals to policy makers –towards system-wide improvement.

The IOM proposed a national agenda thatincludes the adoption of a “nationalstatement of purpose” (see Exhibit 3) anda set of six “aims,” or target areas, forimprovements in health care systems.The Blue Ridge Group strongly endorsesthis effort and the set of proposed aims,which prescribe that health care shouldbe (IOM 2001, p. 6):

• Safe – Avoiding injuries to patients from the care that is intended to help them.

• Effective – Providing services based on scientific knowledge to all who could benefit and refraining from providing services to those not likely to benefit (avoiding underuse and overuse, respectively).

• Patient-centered – Providing care that is respectful and responsive to individual patient preferences and needs and ensuring that patient values guide all clinical decisions.

• Timely – Reducing waits and sometimes harmful delays for both those who receive and those who give care.

Exhibit 2: The Value-Driven Health System

A value-driven health system is grounded in the principlethat a healthy population is a paramount social good. It is a health system that promotes the health of individualsand the population by providing incentives to health careproviders, payors, communities, and states to improve population health status and reward cost-effective healthmanagement. Two kinds of incentives exist within a value-driven health system. First, there are incentives for individualcitizens (patients), health care professionals, health deliveryorganizations, payors, and communities to seek and maintain health. Health insurance premiums, reimbursementrates, and grants to communities can all be structured toreward behaviors and strategies that advance health.Second, providers compete on the basis of quality and effi-ciency for populations to manage (where quality is definedin terms of health of the community or region as well ashealth of individuals). To do so, however, requires a fullyinsured population (universal coverage) so that populationhealth management strategies can be implemented.

7

• Efficient – Avoiding waste, including waste of equipment, supplies, ideas, and energy.

• Equitable – Providing care that does not vary in quality because of personal characteristics such as gender, ethnicity, geographic location, and socio-economic status.

The Blue Ridge Group believes the state-ment of purpose reflects societal aspira-tions for our nation’s health care systemwith which AHCs and the health profes-sions should seek to align their missionsand goals.

These aims can also serve as consensusdrivers for a value-driven health care sys-tem that provides universal coveragethrough a combination of public and pri-vate mechanisms. With universal cover-age, health care organizations can beincentivized to manage and improve thecare of individuals and populationsthrough the development of effective, evi-dence-based systems. Research suggeststhat huge gains in economic value couldbe achieved for society by the systematicpopulation-based application of evenmodest advances in treatment of commondiseases (Murphy and Topel, 1999). AHCscan unleash their reserves of creativity tocatalyze the development of new popula-tion health management strategies, drivecompetition to develop better ways tomeasure and reward quality and efficacyof care, and create more value for thehealth care dollar.

Towards this end, the IOM has articulatedclear and powerful goals that AHCs,health professionals, and the public canembrace. By focusing the public policyspotlight on the inadequacy of existingdelivery systems and system goals, and in

building on the knowledge, skills, anddedication of the healing professions, theIOM has provided an important rallyingpoint for the health care system and forAHCs and health professionals as theyseek to refine their missions and build avalue-driven health care system.

While the six IOM aims are directed atthe health care delivery system, they alsohave implications for AHC research andeducation domains. The research agendacan support the emerging health systemby focusing on issues such as the contin-ued development of quality metrics anddevelopment of protocols to reduce varia-tion in the disease management process.Moreover, AHCs need to work across dis-ciplines and professions to align the size,content, and structure of their educationalprograms with the distribution of healthprofessionals needed in the 21st centuryhealth system.

Exhibit 3: Statement of Purpose for the Health Care System

All health care organizations, professional groups, private,and public purchasers should adopt as their explicit purpose to continually reduce the burden of illness, injury,and disability, and to improve the health and functioning of the people of the United States (IOM, 2001, p. 39).

8

Recommendation

• AHCs, organized medicine, and thehealth professions should renew and,where necessary, realign their goals, val-ues, and missions to better address soci-etal needs and aspirations for our healthcare system.

Action Steps

• AHCs should adopt and advocate thesocietal needs and aspirations articulatedby the Institute of Medicine in its report,Crossing the Quality Chasm: A NewHealth System for the 21st Century.These include the need for a health caresystem that is safe, effective, patient-cen-tered, timely, efficient, and equitable.

• AHCs should adopt and advocate thegoal of transitioning our national healthcare system to a value-driven model ofuniversal coverage and population healthmanagement through a combination ofpublic and private mechanisms, as recommended by the Blue Ridge Groupin its 1998 report, Promoting Value andExpanded Coverage: Good Health isGood Business.

Mission Renewal and RealignmentRecommendation and Action Steps

9

Reform with Change

The AHC, like all provider organiza-tions, seeks to adopt competitive practicesand the fiscal discipline to compete in themedical marketplace. At the same time,AHCs must provide an environment thatencourages people to pursue quality, fos-ter creativity, promote discovery, and nur-ture future health professionals, scientists,and educators. AHCs have had limitedsuccess in achieving this balance, in partbecause traditional AHC organizationalstructures and management approaches areunable to meet contemporary challenges.

AHCs and teaching hospitals haveemployed a variety of organizational andpersonnel management strategies toimprove their competitiveness and fulfillacademic and service obligations.Organizational strategies have includedvertical and/or horizontal integration ofclinical units and departments, large insti-tutional and hospital mergers, acquisitionand development of primary care “feeder”practices, aggressive cost reductions atowned or affiliated hospitals, variousforms of administrative process consolida-tion, reorganization of care processes andpolicies, expansion of outpatient capacity,and improvements in information tech-nology and organizational communica-tions. In some instances, they evenbecame insurers through creation ofhealth care plans. Personnel managementstrategies have included various forms ofindividual and clinical unit productivitygoals and incentivization schemes tied tosalaries and bonuses, departmental andhospital discretionary funds, dean’s fundsand dean’s taxes (Task Force on AcademicHealth Centers, 2000).

Some AHCs have experimented with, andadopted, a “mission management”approach to organizational and personnelmanagement. With this approach, AHCsattempt to develop systems appropriatefor organizing work and managing per-sonnel within each separate mission:research, education, patient care and,sometimes, community service (Bulger etal., 1999). A great deal of work has goneinto creating new metrics for guiding andevaluating faculty performance(D’Alessandri et al., 2000; Sussman et al.,2001).

A major and unintended consequence ofthese new organizational and manage-ment initiatives is that faculty are buffetedby shifting and sometimes conflicting pro-fessional and institutional expectationsand responsibilities. Traditional areas offaculty responsibility, authority, andautonomy are being circumscribed(McKinlay and Arches, 1985; Eisenberg,1999). Unable to devote sufficient time oreffort to research, teaching, or profession-al self-development – goals and activitiesthat are fundamental to their professionalidentity and personal values – many faculty,especially clinical faculty, feel devaluedand disillusioned (Kataria, 1998).Recently published research confirms thatclinical faculty satisfaction is below thatof other medical school faculty(Blumenthal et al., 2001). Many questionwhether academic values and missions arebeing replaced wholesale by “corporate”values (Blake, 1996; Relman, 1994). Onerespected commentator has suggested thatmedical schools are neglecting their uni-versity missions and appear to be regress-ing towards the proprietary school model

Organizational Innovation

10

that was the subject of Abraham Flexner’sscathing report on the status of medicalschools in 1910 (Ludmerer, 1999).

Further, despite these and other ambitiousinitiatives, a substantial number of AHCscontinue to struggle to maintain operatingmargins. A report to the CommonwealthFund Task Force on Academic HealthCenters found in the year 2000 that 14 of17 research-intensive AHCs experiencedeither an operating loss, a bond down-grade, or a negative bond rating(Weisman and MacDonald, 2001). Thisseriously affects the financial strength ofAHCs and limits the traditional utilizationof clinical revenues to cross-subsidizeeducation, research, and administrativecosts within the AHC and throughout theuniversity.

It has become increasingly clear thatmany strategies being employed by AHCs,including most “mission management”strategies, are designed primarily toimprove the efficiency and effectiveness oftraditional systems rather than to definenew ones. This is a typical response that aleading medical sociologist has aptly iden-tified as the pursuit of “reform withoutchange” (Bloom, 1988). The process ofreform without change is likely a majorreason why, after years of various imple-mentations, most AHCs continue to expe-rience turmoil and uneven progress inbalancing missions and achieving goals.

One of the many tests of leadership inthis new environment, following on theneed to revisit and realign values and mis-sions, is to lead necessary organizationalchange. Once again, the IOM report,Crossing the Quality Chasm, providesimportant guidance.

In articulating the growing public andprofessional dissatisfaction with the sta-tus, trajectory, and priorities of the healthcare system, the Crossing the QualityChasm report reaches a conclusion atonce bold and yet almost intuitively obvi-ous by now to professionals and the pub-lic alike:

“The current care systems cannot do the job.Trying harder will not work. Changing sys-tems of care will.” (IOM, 2001)

This is a pivotal conclusion in the publicdialogue concerning our health care sys-tem: The quality of health care and accessthat Americans deserve and desire cannotbe achieved by driving higher productivi-ty in existing systems of care – or by fur-ther consolidating, streamlining, orexpanding these systems. Instead, newsystems must be designed.

“Health care has safety and quality prob-lems because it relies on outmoded systemsof work. Poor designs set the workforce upto fail, regardless of how hard they try. If wewant safer, higher-quality care, we will needto have redesigned systems of care, includingthe use of information technology to supportclinical and administrative processes.”(IOM, 2001)

It is vitally important that AHCs (and allother organizations involved in healthdelivery) take the measure of this asser-tion. It is likely that many existing organi-zational structures within AHCs – theirschools, clinics, and hospitals – are inade-quate. The ability of health professionalsand the health care system to perform totheir potential depends upon the develop-ment of more appropriate organizational,informational, and related systems.

11

This, of course, does not make the exist-ing organizations and processes easy toredesign or to replace. But difficult or not,reform with change is imperative.

Barriers to Change

One of the fundamental impediments tooptimal performance within AHCs is theorganization of faculty in traditional, dis-cipline-based departments. Whether seenas an accident of history or as a rationaldevelopment within 20th century medicaland academic structures, it is clear thatthe traditional departmental organizationis often a barrier to the achievement of21st century missions and goals.

On the clinical side, the departmentalstructure reflects training regimens regu-lated by well-established specialty certifi-cation boards that grew as new technolo-gies and discoveries in biomedical scienceencouraged the proliferation of subspe-cialties. Clinical departments evolved asfaculty-centered structures designed topromote traditional faculty and profes-sional values, priorities, and rewards. Inthe majority of medical schools, and cer-tainly in those considered to be (or striv-ing to be) elite, departmental “silos” havelong served as mechanisms to ensure free-dom of inquiry and protected time forreflection, research, and related academicactivities.

Autonomy and authority are primary val-ues that have permeated the entire profes-sion. Historically, non-academic physi-cians carried and structured these valuesinto their work environments by settingup solo or small, single specialty grouppractices, setting their own hours andcareer goals, developing informal patient

referral networks, and establishing indi-vidual hospital privileges and affiliations.For both academic and non-academicphysicians, often their most meaningfulinstitutional ties have been to their pro-fessional (usually medical or surgical spe-cialty) organizations.

On the basic science side, the departmen-tal structure has served very much thesame functions. AHC and medical schoolbasic science departments developedalong classical divisions dating back tothe origins of the biomedical and behav-ioral sciences: first chemistry, biology, andthe physical sciences, and later proliferat-ing into subspecialties, including microbi-ology and molecular genetics, cell biology,neurobiology, molecular pharmacology,pathology, biomedical statistics, biomedicalengineering, and most recently, genetics.

These basic science departments too,evolved as structures designed to promotetraditional values, priorities, and rewards.Individual creativity and achievement inresearch, including success in winningextramural research funding, have beenmost highly valued and rewarded.

The middle of the 20th century until theearly 1980s was an era of expandinghealth care expenditures, increasing ratesof fee-for-service reimbursement, and relatively robust federal and philanthropicfunding for basic science research. It wasalso an era when both basic and clinicalsciences developed largely through differ-entiation and sub-specialization. It can beargued that the traditional faculty-centereddepartmental structure was a rational andeffective organization by which biomedicalscience and medicine could make signifi-cant strides in such an era.

12

But both the game and the playing fieldhave now changed.

In clinical care, we have already charac-terized the most disruptive changes.Public policy and market dynamics haveforced all providers and provider organi-zations to become far more market-cen-tered. In health care, as in other serviceindustries, the market demands qualityservices at a competitive price. Thisrequires that service organizations have anentrepreneurial and competitive spirit,and demonstrate their ability to meet cus-tomer (here patient and increasingly pur-chaser) needs.

Few would disagree that, while somedepartments are adapting better to thedemands of the market than others, takentogether, clinical departments of AHCmedical schools have been reluctantchange agents. Departments were notdesigned to enable more than relatively adhoc and contingent forms of cross-depart-ment or cross-disciplinary cooperation ineither their service or their academic missions. Despite significant efforts tointegrate many administrative functionswithin integrated faculty practice plans,clinical departments continue to pose barriers to improving clinical operationsand implementing delivery innovations.As a result, the marketplace (and byproxy, usually the medical school dean) is causing unprecedented stress on thedepartmental structure by asking it topursue goals and undertake functions forwhich it is not designed. More than onecommentator has remarked that the clini-cal department chair’s job is becomingalmost untenable (Korn, 1996;Aschenbrener, 1998).

In the basic sciences, the causes of stresson the departmental structure are ofsomewhat different origin. It is largely theprogress of science itself that has begun tobreak down previous divisions betweendisciplines. The convergence of biomed-ical science around the methods of cellu-lar and molecular biology has made thesemethods relatively ubiquitous. Therefore,over the last decade, the importance ofdepartmental affiliation in differentiatingbasic science faculty has diminished.Departments are becoming more alike inthe questions being addressed, in the sci-ence being applied, and in the trainingbeing provided. Also serving to loosenthese structures are collaborative servicelaboratories needed to perform analysessuch as high-end computation. Eventhough academic advancement stillrequires investigators to demonstrateindependence and originality, cross-disci-plinary and cross-departmental collabora-tion have become routine, if not neces-sary, for successful work.

Yet, while academic departments areunder great strain, they continue to haverelevance and to serve important func-tions in structuring and protecting theacademic life of faculty, in education, andin the organization and administration ofmany other institutional goals. And manyexternal systems and structures remain inplace that make departmental divisionsstill important. Among these are academicand professional societies and journals, aswell as public and private research fund-ing agencies, many of which still look tosupport work initiated within specifieddisciplines by individual investigators.

13

The challenge for AHCs, therefore, is todevelop new organizational arrangements,systems, and processes that can:

• Draw from and strengthen important academic and administrative roles traditionally played by the departments; and

• Overcome departmental barriers and enable the appropriate organization of faculty to meet pressing new missions and goals.

A survey of such efforts suggests someprinciples and approaches that can guideleaders in the effort to reform withchange.

Change in Research

The Program in Biological Sciences (PIBS)at the University of California SanFrancisco (UCSF) Medical School repre-sents one approach to reforming organiza-tions around research. The PIBS was cre-ated in 1985 to leverage themethodological convergence in the basicbiological sciences. UCSF concluded thatprogress might best be achieved throughprograms rather than departments. Thegoal was a new organization that wouldnot replace the departmental structure,but overlay it with a research and trainingorganization that would enable facultyand students to easily cross departmentalboundaries to pursue work and collabora-tion. The PIBS has been very successfuland UCSF is currently developing anentirely new biomedical sciences campusand pursuing clinical reorganization ini-tiatives based on this model.

Extrapolating from this effort, the princi-ples most important to the success of thismodel appear to have been to:

• Ensure the integrity and continuing viability of individual basic science departments by pre-serving their roles in the administration of research and education programs; and

• Create a new mechanism through which departments can align their interests and optimize their resource utilization and performance in the pursuit of common goals.

This was accomplished by a strategy thatincluded:

• Strong leadership in building a consensus among chairs and departments for the need and opportunity to pursue such a model;

• Establishing an organizing mechanism – the PIBS Executive Committee – made up of all basic science chairs and elected faculty members;

• Centralizing faculty recruitment, admissions, curricular, and core facilities responsibilities largely with the PIBS Executive Committee;

• Securing departmental control over their full-time employees or FTEs, space, appointments, and promotions; and

• Making each department the home of one or more research or graduate program, so that multidisciplinary research and graduate training programs continued to be administered by individual departments as a resource for all departments.

The result is an organizational structurethat reinforces mutual incentives andreciprocal responsibilities (see Figure 1).It is a model that enables faculty to coop-erate to achieve common and converginggoals. It allows for small new teams of tal-ent to develop new programs and projectsthat can function as new “businesses”within the larger organizations. Theimportant roles of the departmental struc-ture are maintained for faculty.Department chairs are empowered toaddress both departmental and broaderinstitutional goals. Students have access

14

to the entire basic science faculty forresearch and doctoral work. But largerperspectives are possible and new “micro-organizations” can also form and flourish.

Change in Clinical Care

In clinical care, there has been progress indeveloping new organizations and sys-tems that cross departmental barriers.These primarily involve the developmentof “centers” for either disease- or demo-graphic-specific care. Many AHCs, com-munity hospitals, and other providershave developed specialized centers forcross-disciplinary, comprehensive care.These include spine, diabetes, eye, mentalhealth, and cancer centers, as well as chil-dren’s, women’s, and geriatric health cen-ters and others. There is growing consen-sus in the provider community that suchcenters offer a more patient-centered envi-ronment than the traditional multi-site,multi-department approach.

Also becoming more widely understood isthe prevalence and impact of chronic dis-ease on population health status and onhealth care costs. Chronic conditionsaffect almost half the population andaccount for a majority of health care costs(Hoffman et al., 1996). Both professionalsand the public are increasingly aware ofthe inadequacy of fragmented and episod-ic care for the management and treatmentof chronic illness or disability (Wagner,2000). The recent Medical ExpenditurePanel Survey (MEPS) of the Agency forHealthcare Research and Quality (AHRQ)and the National Center for HealthStatistics identified fifteen commonchronic conditions as the leading causesof morbidity and mortality in the nation.These include: cancer, diabetes, emphyse-ma, high cholesterol, HIV/AIDS, hyper-tension, ischemic heart disease, stroke,arthritis, asthma, gall bladder disease,stomach ulcers, back problems,Alzheimer’s disease and other dementias,and depression and anxiety disorders(MEPS, 2000).

Within AHCs, by far the most well devel-oped centers for multidisciplinary care arethe comprehensive cancer centers. Thebest of these, particularly those that haveachieved National Cancer Institute (NCI)comprehensive cancer center designation,are examples of what it is possible toachieve within the AHC environment –and only within that environment.

These centers combine the best inadvanced care, research, and training.They bring together expertise from manydisciplines, including medicine and sur-gery, nursing, nutrition, rehabilitation,and others. They also bring together awide range of diagnostic and treatment

Anatomy of PIBS

Departments

Anatomy

Biochemistry

Microbiology

Pharmacology

Physiology

Developmental Biology

Structural Biology

Genetics

Immunology

Cell Biology

Neurosciences

Pharmacogenetics

PROGRAM EXAMPLES

Faculty Recruitment

New Programs

Admissions

Curriculum

Retreats

PIBS “Pizza”

UCSF Fellows

Opportunity Funds

PIBSEXECUTIVECOMMITEE

Figure 1: Anatomy of PIBS

15

resources. They enable faculty and staff todevelop systematic approaches to particu-lar diseases and customized approaches toindividual patients. Teams of careproviders and staff routinely organize andre-organize to meet various demands andto pursue new courses of research, treat-ment, or training. Patients are accommo-dated and their families are supported byfacilities and services centrally and conve-niently located. At their best, they allownew subgroups to develop and pursuenew ideas coming from research effortsdiscovered within or external to theorganization.

These centers are vitally important toprogress in the diagnosis and treatment ofcancer nationwide. They are prime exam-ples of patient-centered health servicesand a compelling model for similar effortsaround other chronic diseases. They are aleading paradigm for how AHCs can bethe foundation for progress across theirmultiple missions in research, education,and care. The most innovative centers areconstantly looking to leverage new ideasand technologies, such as the Internet, tofurther improve patient management andresearch activities. Yet comprehensive centers like these are not yet the standardapproach for delivering complex care.Why?

The most important factors normallydescribed are limited federal funding andpayor reimbursement systems that do notrecognize or reward collaborative care.Regardless of other issues and barriers,the inability to fund the creation of suchcenters or to receive appropriate paymentfor health services provided within them,severely limit the capacity of health pro-fessionals and organizations to develop

the coordinated systems of care theyknow would better serve their patients. Itis time to break down these barriers. And,it is time for AHCs to lead the way in sug-gesting and pressing for specific policiesand reforms that will address these barriers.

The existing organization of AHCproviders and health services in depart-mental units is insufficient for the task oforganizing and delivering comprehensivedisease-focused, patient-centered care.And although the departmental modelmay be viable for episodic care, thatmodel cannot support the transition to avalue-driven health system that includespopulation health management.

It is imperative, therefore, that AHC andhealth professions leadership cometogether to forge, embrace, and aggres-sively advocate a new leadership agenda.The Crossing the Quality Chasm reportstrongly urges major health system stake-holders to adopt the fifteen leading chron-ic conditions identified by the MEPS as“priority conditions” around which tofocus efforts to re-organize the health sys-tem. The Blue Ridge Group supports thatrecommendation.

A new leadership agenda must aggressivelypursue the expansion of federal support forthe establishment of patient- and disease-centered efforts. It must also pursue reformin public and private reimbursement systems. Payments must be aligned withdesired practices and outcomes so thathealth professionals and provider organiza-tions can transition to more functionalstructures and organizations.

16

Finally, a new leadership agenda mustsupport a dramatic increase in our capaci-ty to assess, measure, and improve qualityand outcomes in health care. We nowknow that discovery of new treatments isnot the cure. Research has shown thatvaluable innovations require, on average,seventeen years before they are picked upand generally applied (Balas, 2001). Eventhen, substantial variations in perform-ance persist. Strong advocacy must beundertaken to generate the federal fund-ing resources that can support newresearch on quality and outcomes metricsand the development and application ofinformation technology needed to meas-ure quality and assure improvement inmanaging outcomes.

Change in Education

The educational and training missionswithin the AHC are no less in need oforganizational redesign. Even though themedical school has long been the organi-zational center of the AHC, starting withthe Flexner report of 1910, medicalschools have been regularly criticized forallowing their education programs to takea back seat to other missions. In thedecades following the establishment offederal funding for research through theNational Institutes of Health (NIH) andother agencies, medical schools have beencriticized for valuing faculty contributions(and funding support) in research overcontributions towards medical studenteducational goals. In more recent years,they were criticized for valuing contribu-tions (revenue generation) in clinical careover educational service (Ludmerer, 1999).

It is not surprising that educational pro-grams might take a back seat to othermission imperatives. There have beenstrong financial incentives for medicalschools to encourage and reward facultyachievement in research and productivityin clinical care. Significant programs forfunding of biomedical research are provid-ed through the federal government, phi-lanthropies, and the private sector.Clinical revenues, in particular, have beenused to cross-subsidize the costs of med-ical education. Very few such financialresources, public or private, have everexisted for the direct support or incen-tivization of teaching.

A sudden flood of new funding would notbe enough to address the need for educa-tional reforms. As it has in the other mission areas, the faculty-centered depart-mental structure has defined and increas-ingly limited educational innovation.

Until some significant reforms undertakenin the last decade of the 20th century,most medical school curricula wereorganized into two to three years of largelecture courses in the biological sciencesfollowed by one to two years of clinicalrotations. This structure enabled the vastmajority of faculty to avoid any teachingobligations, and for those with suchduties or aspirations, to teach only one totwo courses per year. Many “teaching”faculty taught (and many continue topresent) only one or two lectures persemester or per year, with many clinicalteaching duties handled by “voluntaryfaculty” preceptors in the community.

Nevertheless, a critical mass of extremelydedicated teachers developed in allschools. Though sometimes held in less

17

esteem by research-driven colleagues andpassed over for promotion, they havemanaged to structure supportive learningenvironments. Often spurred by thenational accrediting body, the LiaisonCommittee on Medical Education(LCME), medical schools have devotedthe resources necessary to meet andexceed traditional professional standards.

In the late 1980s and early 1990s, a med-ical educational reform movement sweptmedical schools. Medical education, char-acterized by the large lecture format andminimal interaction with faculty, was sub-ject to much critique. Molecular biologywas changing and vastly expanding theknowledge base. Medical practice waschanging as the new market-driven envi-ronment began to impinge on the organi-zation of care. Gender and cultural issuesin the delivery of care grew more promi-nent. It was no longer enough for medicalstudents to learn primarily through mem-orization and recitation. They had tobecome problem solvers.

The new model developed and adopted bymany schools was the small group semi-nar and problem format. Many large lec-ture classes were replaced, or more often,augmented by small group seminars, jour-nal clubs, and problem-solving sessions.The basic science curriculum wasredesigned to reflect the cross-disciplinaryconvergence around the new methods ofmolecular biology and genetics. Studentsalso were offered courses on medicalethics, medical economics, and other rele-vant topics. New clinical rotations wereadded in non-traditional outpatient andambulatory settings. Deans and depart-ment chairs were creating flexible teach-ing funds and working to adjust promo-

tion criteria that would weigh teachingcontributions more heavily.

Just as faculties and departments werepledging a renewal of support for theteaching mission, the market and publicpolicy tide turned and resources began totighten. Deans and departments nowfaced the prospect of having to fulfill significantly increased commitments offaculty time and departmental resourcesto the teaching mission at a time whenthey faced increased clinical demands andthe reduction of departmental financialresources.

While new curricula are being imple-mented to favorable reviews in AHCsaround the nation, the increased expecta-tions and resource requirements haveheightened the strains within andbetween departments. Clinical depart-ments and faculty are affected more thanthose in the basic sciences. Departmentstrying to fulfill teaching obligations pressfaculty to teach. Clinical faculty who liketo teach, increasingly are pressed to generate revenues and meet clinical productivity goals and measures. Mostdepartments struggle with even minimalteaching time and resource requirements.Many clinical faculty argue that theyshould be separately compensated fortime away from the clinic.

Once again, the limitations of the depart-mental structure are implicated in theproblem of meeting mission goals in thisnew era. That traditional departmentalstructures would have difficulty with theeducational mission might seem surpris-ing. It should not. The educational mis-sion must draw on the same constellationof inter- and cross-disciplinary resources

18

as the other missions. Institutional expecta-tions, environmental factors, faculty com-mitments, and departmental priorities andresources are not aligned. Departmentchairs, individually or collectively, do nothave the real or organizational resources tomeet the demands of this new environment.

Aligning the teaching function with theresearch and care missions within theimperatives of the current environmentcan only be achieved with the properorganization of faculty and resources. As with the other missions, this requiresmechanisms for cross-disciplinary andinter-departmental cooperation and reciprocation.

A great many efforts are underway withinAHCs as well as among professional andindustry associations to develop rationalresponses. Most AHCs have developedspecial departmental or institutionalteaching funds to provide awards andbonus incentives for faculty teaching.Many have developed salary adjustmentand other compensation formulas basedupon the relative valuation of teachingand other mission fulfillment activities(Rouan and Wones, 1999; Sussman et al.,2001). At the same time, the drop in med-ical school applicants and the shifting dis-tribution of students seeking post-gradu-ate training is causing increased reflectionwithin the various specialties as they toolook at their “market” of consumers.While many of these approaches areextremely laudable and quite sophisticat-ed, most are progeny of the “reform with-out change” approach. Most will failbecause they are aimed at reforming theprocesses of a structure that can no longer support its function.

Real and necessary change will requiremore. At UCSF, a novel program to sup-port teaching is the Academy of MedicalEducators. The Academy is an interde-partmental network of master teacherswho are selected by a peer review process.Membership in the Academy is a specialhonor that can be supported by a five yearendowed chair. The Academy has beenreplicated in at least one other AHC andothers are studying it.

The advantage of this approach is that anew organization is being created andpopulated by master teachers who willrepresent the best in educational commit-ment throughout the organization. TheAcademy’s effectiveness will, however,depend on how it is organized and devel-oped. If the Academy develops simply as afaculty-centered network of gifted anddedicated teachers, this approach couldturn out to be simply another form ofincentive and reward system, or a newinstitutional mandate competing with tra-ditional departments for resources. Theseoutcomes would signal a reform withoutchange.

To be a reform with change, the Academywill have to develop into an organizationthat involves departmental leadership andthat has the power to effect the mar-shalling and reorganization of some depart-mental functions and resources into coop-erative programs structured to achievestudent-centered educational goals.

19

Organizational Innovation Recommendation and Action Steps

Recommendation

• AHCs should develop and implementorganizational innovations and programsthat enable faculty and staff to achievesocietal health care needs and to create avalue-driven health care system.

Action Steps

• AHC leadership should adopt the fif-teen leading chronic conditions identifiedby the MEPS as “priority conditions”around which to focus organizationalreform efforts.

• AHC and other provider health sys-tems should support the development ofcomprehensive disease- and/or demo-graphic-centers of care on the model ofthe NCI Comprehensive Cancer Centerdesignation.

• AHCs should systematically review theroles of existing academic departmentalstructures and develop new organizational

approaches to managing the barriers theypose to clinical, research, andeducation/training programs.

• AHCs should pursue changes in publicand private payment systems that willeliminate payment barriers and disincen-tives for providers and provider organiza-tions transitioning to practice in such newstructures and organizations.

• AHCs should seek federal and othersources of support for needed researchand the development of quality and out-comes measures and the application ofinformation technology to quality and out-comes management improvements.

• AHCs should lead efforts to demon-strate the value of organizational restruc-turing on health care and health status.

20

Optimizing Performance

For more than a century, social scien-tists, and more recently, business manage-ment experts, have studied the effects oforganizational change and dislocation andhave developed sophisticated models ofprocess and personnel management.French sociologist Emile Durkheim laidthe foundation for this work at the turn ofthe 20th century. Durkheim wrote a path-breaking treatise on a major and growingfact of modern societies, the phenomenonof suicide. He described a new schematicof causes of suicide in modern societiesand introduced, among others, the con-cept of “anomic suicide” (Durkheim,1966). Durkheim described anomie as acondition of personal dislocation and anx-iety often caused when social conditions(usually social or economic upheaval)cause individuals or classes of individualsto lose their sense of the importance orvalue of their contributions to society.Traditional values and definitions of suc-cess are called into question. New valuesand normative expectations are not yet welldefined and may be years or decades fromfull social articulation and codification.

The principle academic resource ofa university is its faculty.

– James J. Duderstadt, A University for the 21st Century, 2000

As a result, affected individuals or classesof individuals essentially lose their way.They lose their motivation. They lose theframe of reference necessary to solveproblems, or even define success. Theybecome discouraged and disillusioned. Atthe extreme, they commit suicide. In anearlier work, The Division of Labor inSociety, Durkheim identified anomie as aproblem inherent to the ever-changing,increasingly complex division of laborand fragmentation of traditional commu-nities in modern societies (Durkheim,1964). He went on to suggest that a criti-cal role for society, including leaders ingovernment, industries, and all profes-sions, was to develop common goals(based on humane values) and systems bywhich affected individuals and groupscould renew and sustain the motivation tounderstand and contribute in times of sig-nificant change (Blue Ridge AcademicHealth Group, 2000).

Enabling Knowledge Workers

21

Through successive waves of technologi-cal, organizational, and marketplacechanges during the 20th century, mostindustries, companies, governments, andorganizations of any significance havedeveloped in-house human resource andorganizational management capabilities.Catalyzing, organizing, and responding tothe many human resource challenges ofchange has become a significant corecompetency; however, neither the medicalprofession nor universities and their aca-demic health centers have kept pace withthe development of such capacities.Academic faculty, especially AHC faculty,have pursued academic and service func-tions in a relatively protected, self-regulat-ed, and unchanging environment. Theyhave operated with relative autonomy inhost institutions under well-establishedand stable systems of academic and pro-fessional conduct, expectations, and goals.

With the changed health care environ-ment, universities and their AHCs can nolonger operate as simply host institutions.They are now like other large and com-plex organizations that must support andmanage system-wide change involvinglarge numbers of professionals and staff.AHCs must quickly learn, and incorporateas a core organizational competence, theart and science of managing the “knowl-edge worker” (see Exhibit 4).

Exhibit 4: The Knowledge Worker

“An ever-growing percentage of people are ‘knowledgeworkers’: information and knowledge are both the rawmaterial of their labor and its product ... It’s not only thatmore people do knowledge work; also increasing is theknowledge content of all work, whether it’s agricultural, bluecollar, clerical, or professional. A physician today, armedwith antibiotics, magnetic-resonance images, and microsur-gical techniques brings far more knowledge to his workthan his pre-World-War-II predecessors, whose principaltools were boiling water and a kindly manner.” From Intellectual Capital: The New Wealth of Organizations,T.A. Stewart, 1997, p. 41.

22

The university and the AHC are the para-digmatic employers and creators of knowl-edge workers. Most of the organizationalstructures within these institutions,including the traditional departments,have been extremely well adapted forknowledge work. Two distinguishing char-acteristics of these professionals are thatthey are self-directed and motivated, pro-vided they have an opportunity to applytheir knowledge effectively. Unlike manuallaborers or other “directed” workers, theyexpect their work to be defined not by itsquantity or its costs, but by its results(Drucker, 1996). They are best employedand managed as “associates” rather than“subordinates” – the way a conductordirects an orchestra. Following Durkheim’searly observations, contemporary researchconfirms that if knowledge workers aremismanaged and lose their sense of beingeffective within an organization, they willlose direction and motivation.

Drucker identifies six factors for organiza-tions and professionals to consider as theyseek to strengthen knowledge worker pro-ductivity (Drucker, 1999, p. 142):

• Knowledge worker productivity demands that we ask the question: “What is the task?”

• It demands that we impose the responsibility for their productivity on the individual workers themselves. Knowledge workers have to manage themselves. They have to have autonomy.

• Continuing innovation has to be part of the work, the task, and the responsibility of knowledge workers.

• Knowledge work requires continuous learning on the part of the knowledge worker, and equally continuous teaching on the part of the knowledge worker.

• Productivity of the knowledge worker is not – at least not primarily – a matter of the quantity of output. Quality is at least as important.

• Finally, knowledge worker productivity requires that the knowledge worker is both seen and treated as an “asset” rather than a “cost.” It requires that knowledge workers want to work for the organization, in preference to all other opportunities.

Drucker starts with the question; “Whatis the task?” because, unlike manualwork, where the task is given and obvi-ous, in knowledge work, the task often isnot obvious to anyone except the relevantknowledge workers. Having responsibilityfor defining the tasks, including how thework should be done, enables and moti-vates knowledge workers to take respon-sibility for structuring effective solutions.

While at first blush, this might seemsomewhat utopian or unrealistic, there are innumerable examples of knowledgeworkers assuming such responsibilitywith great success (Drucker, 1999).However, it might be enough to contem-plate the differences in productivity andmotivation between a clinical facultymember in a department for whom signif-icantly higher clinical output targets havebeen set, and a clinical faculty in a comprehensive cancer center setting faced with the same new goals.

In general, faculty measured againstdepartmental productivity targets willlikely be less motivated than those work-ing in a more comprehensive clinical caresetting. A faculty member in the first situ-ation will have few choices but to seemore patients. She or he will have littlechance of affecting the goals or definingthe “task,” and is reduced to reacting as asubordinate, rather than engaging as an

23

associate. A faculty member in the secondsituation will have better opportunities towork with colleagues and teams to definethe task and to refine work processesand/or resource utilization to achieveinstitutional goals. She or he will be ableto redefine the task in order to achievehigher quality outputs that can affectfinancial performance. The faculty mem-ber treated (however inadvertently orindirectly) as a subordinate will not per-form as well as the faculty member able toengage and define the task as an associateand team member.

Clarifying Expectations

Virtually all AHC faculty and staff areknowledge workers. Management of AHCfaculty is legendary in its difficulty. Evenbefore the era of market-driven change, itwas often sardonically described as “herd-ing cats.” Now, however, the sardonicgrins have disappeared and a new sense ofurgency in managing these particularknowledge workers has taken its place.Many AHCs have embarked on compre-hensive programs designed to bring newmanagement discipline and performanceexpectations to their faculties (e.g.,University of Alabama at Birmingham andWashington University) (Blue RidgeAcademic Health Group, 1998a). MostAHCs have worked to redefine facultyand staff performance goals and metricsand realign them with changing environ-mental and organizational missions andexpectations.

For instance, more than five years ago,the Baylor College of Medicine initiated aprocess of faculty evaluation. The effortstemmed from a strategic plan initiatedout of the realization that the organization

had to understand and then change andadapt to new market conditions in allthree missions. Vitally important to thiseffort has been the development of newstandards and metrics by which facultycan calibrate their expectations and con-tributions – and by which those contribu-tions can be measured, assessed, adjusted,and rewarded. Critical to this entireprocess has been the gathering and organ-izing of data from and about all aspects ofpatient care, education, and research.

Important lessons can be gleaned fromBaylor’s effort about how a change processaffects those directly involved. One lessonis that the very process of collecting datacan itself be a significant change andcause significant stress within the organi-zation. Data collection is not a value-neu-tral process. It is an activity that signalsand represents important informationabout how missions, values, and goals arebeing (or are likely to be) redefined.Every new bit of data requested and collected is likely to signal implicationsfor the roles and expectations of thosefrom, or about, whom the data is collect-ed or provided.

It is therefore important to manage thedata collection process as carefully as anyother aspect of the change process.Affected faculty and staff must be incor-porated into, and informed of, the changeprocess, beginning with the definition ofrelevant parameters, data needs, and datacollection processes. Baylor has alsoaddressed faculty concerns by ensuringthat individual faculty data remains confi-dential between faculty and chairs, withonly departmental-level data shared withdeans or the board.

24

The Baylor initiative has led to the devel-opment of a sophisticated set of financialmetrics used to measure effort, contribu-tion and success in each mission area (seeAppendix 1 for an in-depth description ofthese metrics). These and similar meas-ures have been developed by other AHCs,many with the assistance of consultingfirms, like Cap Gemini Ernst and Young(CGE&Y). These metrics are necessaryand important tools that promote align-ment of faculty and staff efforts with newmarket realities.

Nevertheless, despite a great deal of facul-ty participation in the development ofsuch metrics, Baylor and all other AHCsreport significant faculty dissatisfactionwith them. Although still early in theprocess, common complaints are that theyepitomize the “commoditization” ofhealth care and diminish the status androle of the health professional in the careprocess (Johns and Niparko, 1996). Whilethey quantify and enable measurement(often for the first time) of faculty andstaff productivity and its financial impact,these measures may be limited by whatthey measure accurately as much as bywhat they do not measure accurately.Most difficult to assess are measures ofthe quality and outcomes of faculty andstaff effort along each mission focus.

For faculty, professionals, and knowledgeworkers in general, who have high andvery specialized levels of expertise andknowledge, judgments and measurementsof quality are usually the most importantmetrics. Admittedly hard to quantify, theyare nevertheless routinely acknowledgedand measured by peer respect and esteem.

AHC management and productivityenhancement measures that fail to ade-quately develop and factor-in quality met-rics, however, may be fated to fail. Mostare likely to be only minimally effective inorchestrating the change and performancerequired. Baylor has taken the positionthat there are core metrics that help chairsand deans to lead and manage, recogniz-ing that certain individual contributionsare best assessed qualitatively by the rele-vant chair or supervisor (Garson, 1999).

Measuring Quality andOutcomes

In clinical care, quality and outcomesmeasures incorporated for faculty evalua-tion are often limited to patient satisfac-tion surveys. These are helpful and useful,but are only a first step in capturing,quantifying, and measuring the qualityand outcomes of care. Since quality andoutcomes are what matter most to theknowledge worker, it is absolutely criticalthat such measures become integral andprimary in faculty commitment and evalu-ation metrics. The first report of the BlueRidge Group provides sample recommend-ed performance measures for AHCs thatinclude measurements of quality, innova-tion, and societal value (Blue RidgeAcademic Health Group, 1998a).

Understanding that the current status ofdevelopment of such metrics is universallyacknowledged to be rudimentary, how canthis problem be addressed? The first step,as Drucker suggests, is to ask the ques-tion: “What is the task?” If the task is tounderstand how to measure and evaluatequality and outcomes of clinical care, then

Improving the productivity of knowl-edge workers and service workers willdemand fundamental changes in thestructure of organizations. It may evenrequire totally new organizations.

– Peter Drucker, The Post-Capitalist Society, 1994

It is important to remember that thesystem for measuring success in anyorganization has evolved over manyyears. It is as much a part of anorganization’s “culture” as are stylesof dress and unquestioned norms of

conduct. It simultaneously influences, and is influenced by,every part of the organization.

– Peter Senge et al., The Dance of Change: The Challenges to Sustaining Momentum in Learning Organizations, 1999

25

26

who is in the best position to answer thatquestion? Primarily, (though not exclu-sively) it is the clinical care professional.

The second step is to give the responsibil-ity of answering this question to the clini-cians. When asked what quality is, clini-cians often respond, “I don’t know how toexplain it, but I know it when I see it.” Ifthey are not motivated to go beyond thatexplanation, then their clear knowledge ofwhat constitutes quality will remain with-in the knowledge base shared by their rel-atively small group of professional peers.If, however, these clinicians are teamedwith other knowledge workers who areexperts at developing metrics for intangi-ble measures, progress can surely bemade. As simple as this might sound,these two steps have yet to be taken seri-ously. They should be.

In research, quality and outcomes metricsare better grounded. They are embeddedwithin the peer-review process that servesas the foundation for awarding researchsupport to investigators. There is also,within each field of research and scholar-ship, a hierarchy of journals, invited lec-tures, and other forms of “publication”that assess contributions along the hierar-chy. This is a firm foundation, thoughmore can be done.

For instance, over many years in GreatBritain, a complex bibliometrics algorithmhas been developed and continuallyrefined, which assigns weighted values toall professional publications. This effec-tively creates a hierarchical ranking basedon reputation. The publishing record ofindividual scientists and faculty in theuniversities is tracked and weighted bythese metrics and can be accessed for the

purposes of evaluating the quality of sci-entific work of candidates for promotionand hiring.

Though understandably difficult to cali-brate precisely and subject to somedebate, there is growing interest in theadoption of this, and related quality met-rics in the United States (Holmes et al.,2000). Since scientists, too, will claim toknow quality when they see it, efforts toquantify and make such knowledge acces-sible seem a reasonable and importantproject to shore-up a new focus on knowl-edge-worker support and management.

Equally important is the acceleration andexpansion of quality and outcomes met-rics for teaching faculty. A variety of met-rics exist, including, but not limited to,student evaluations, peer review throughobservation and review of pedagogicalmethods, performance of students onstandardized tests, and scholarly contribu-tions in the field and in the developmentof pedagogical methods.

Yet, broadly accepted standards by whichto measure relative strengths of faculty inteaching are lacking (Blumenthal, 1997).This gap exists because teachers face amoving target. Student populationschange over time and present differentlearning needs. Content requirements areconstantly evolving and new technologiescreate new pedagogical opportunities.Moreover, comparisons across disciplinesare complicated. Different subjects,departments, and schools attract studentswith differing abilities, motivations,demographics, prior preparation, andexperience. Additionally, the developmentof standardized metrics is impeded bylimitations on access to needed data.

27

For instance, a leading researcher and hiscollaborators, conducting research ontraining outcomes and quality, asked allspecialty certification boards for data ontheir board certification examination passrates. All but one specialty board declinedor failed to provide this information.Analysis of what limited information wasobtained raises a range of important ques-tions about training outcomes that, amongother things, could aid in developingquality and outcomes metrics that couldbe applied to evaluating, designing, andimproving clinical training (Blumenthal etal., 2001). In education, as in clinical careand research, significant progress indeveloping quality and outcomes data andmetrics is both possible and essential.

AHC, academic society, and health profes-sions leadership must become the leadingadvocates for the development of qualityand outcomes metrics in every missionarea. Renewed federal funding forresearch and development of such metricsis essential. The full cooperation of allacademic, professional, and institutionalstakeholders in accommodating suchresearch and development is also essen-tial. For example, all certifying boardsshould publish their board pass rate databy program, as has been the policy of theAmerican Board of Internal Medicinesince 1996.

Bringing Good Things toLife

We spend all our time on people. The daywe screw up the people thing, this company is over.Jack Welch, CEO, GE

The General Electric Company (GE) is aglobal corporation with dozens of enter-prises in hundreds of locations around theworld (Lynch, 2001). During Jack Welch’s30 year tenure as Chairman and CEO, GEgrew from a $28 billion to a $130 billioncompany. The vast majority of GE’s350,000 person workforce consists ofknowledge workers, some of whom arededicated research scientists, engineers,and high technology professionals. Thechallenge of managing this large, diverse,international workforce is daunting.While much about the GE situation is notdirectly analogous or applicable to AHCstoday, there are a number of knowledgeworker management practices and policies that deserve emulation.

GE considers its dedication to “People,Processes and Performance” as key to itssuccess. These three elements are driventhrough the organization by a strong leadership process that continuously evaluates, articulates, and then reinforcesorganizational priorities and values. Theorganization is defined by the need toconstantly drive change so that it isalways seeking and creating new growthopportunities. Change is driven through acombination of organizational structuresand processes built around:

• Hiring great people

• Creating a performance culture

• Linking results with rewards

• Demanding shared values

• Believing everyone counts

Professional and leadership developmentare primary functions of the organizationand new talent is constantly sought after

28

and aggressively recruited. Continuouslearning, performance appraisal, and feed-back mechanisms are built into the workschedule and process. These activitiesoccur at every level of the organization.Major milestone meetings are scheduledup to a year in advance and attendance ismandatory. This embedded managementprocess also serves as a way to connectpeople throughout the organization andfor continuous communication “bottom-up and top-down.”

The most valuable asset of a 21stCentury institution, whether businessor non-business, will be its knowl-edge workers and their productivity.

– Peter F. Drucker, Management Challenges for the 21st Century, 1999

Critically important to their enterprise isthat everyone in the organization knowsexactly what is expected of them, whichmetrics are being used, and why, and howthey are measuring up. People are put atrisk and held accountable for certain com-mitments and they share amply in therewards for reaching the objectives. High-level performance is generously rewardedthrough pay and promotions. Continuousfeedback and learning, and ongoing eval-uation create highly motivated peoplewith the tools to meet and exceed expec-tations. Collegiality, flexibility, the abilityto work with and motivate others and tomake good decisions are all highly valuedand rewarded. People are regularly movedand promoted and new teams are createdto meet new opportunities.

Since GE puts such significant resourcesinto developing the capabilities of its peo-ple, it is also keenly aware of the cost oflosing those people, whether to competi-tors or to unrelated industries. Therefore,GE makes what some might considerextraordinary efforts to ensure that thefeedback loop runs in all directions andthat its people feel like they and theirfamilies matter in the organization. Special programs, gifts, dedicated services,and communications all play an impor-tant role in building a relationship notjust to the worker, but to the person.

No doubt, this is a high intensity environ-ment. The pressure to perform, to dedi-cate oneself to the organization’s valuesand goals, to meet and exceed objectives,is unrelenting. Individuals have to workhard to balance competition and collegial-ity, and personal and professional obliga-tions. Nevertheless, employee retention isextremely high and people are seldomsummarily dismissed. The ongoing evalu-ative process enables the organization toidentify issues or areas in need ofimprovement early, so that individualshave the opportunity to work on themand improve.

While the goals and some of the values ata global corporation like GE may notalign completely with those of an AHC,the need to manage and motivate knowl-edge workers is highly analogous. The GEexample illustrates how it is possible,with the appropriate organizational struc-tures and personnel management policiesand processes, to motivate extraordinarilylarge and diverse organizations of knowl-edge workers to maintain high levels ofperformance. It also illustrates how dedi-cating organizational resources to the

29

development of people can sustain moti-vation even when policies or processessometimes fall short.

In the AHC, and in universities more gen-erally, there is nothing like this level ofresource commitment or organizationalfocus for the purpose of supporting facultyand staff in their professional developmentand in their work. For the healing profes-sions to attract and retain the best and thebrightest in the future, it has no alternativebut to adopt many of these proven meth-ods. The example of GE and hundreds ofother companies and organizations offer aclear example for AHCs now strugglingwith the imperatives of the marketplaceand with motivating an increasingly unset-tled knowledge workforce.

30

Recommendation

• To enhance value-creation, motivateperformance, and improve quality andoutcomes, AHCs must develop a newunderstanding of knowledge workers andthe types of organizational systems andprocesses required to manage and leadthem. AHCs should commit to ongoingleadership, professional, and staff develop-ment as an integral part of each mission.

Action Steps

• AHCs should build upon proven lead-ership and management approaches andhuman resources development programs,like those of GE, that align with the wayhighly skilled knowledge workers areproperly supported and motivated.

• AHCs should re-evaluate acceptedmeasures of performance and value onan ongoing basis, and identify ways toenable faculty to better manage theirroles, responsibilities, and expectations.AHCs must develop more sophisticatedmeasures of value creation to guide theorganization, direction, and evaluation ofinstitutional and personnel performance.

• AHCs should ensure that all facultyand staff in management and supervisorypositions are provided training and sup-port in the delivery of regular performancefeedback and the development and men-toring of professionals.

Recommendation

• AHCs should develop new andimproved human resource capabilities thatenable routine performance appraisals,identification of new talent, cultivation ofskills, and mentoring of faculty and staff.

Action Steps

• AHCs should experiment with policiesthat motivate faculty through the distribu-tion of risk and reward.

• AHCs should develop enhanced toolsfor measuring performance of the systemand individuals (i.e., metrics) to promoteaccountability.

• National organizations, such as theAssociation of American Medical Colleges(AAMC), Association of Academic HealthCenters (AHC), or Institute of Medicine(IOM) should conduct or sponsor studiesof enhanced Human Resources capabili-ties and infrastructure for AHCs.

Enabling Knowledge Workers Recommendations and Action Steps

31

Developing New Archetypes

A final critical dimension of the AHC andhealth professional organization that mustbe reformed and realigned is the cultureof the organization. The AHC and themedical profession have traditionally beensupported by three cultural archetypes.

The first is the ideal of the independentand original investigator. For the doctoraldegree and for academic and professionaladvancement, the individual candidatemust demonstrate independence ofthought and originality of achievement.The training of students and career trajec-tory of faculty are effectively defined bythe requirement to distinguish oneself andone’s work from that which preceded itand to show originality relative to thework of one’s peers.

The second archetype is the “triple threat”faculty physician. This is a high energyindividual who is a great clinician, a solid,if not brilliant, investigator, and an inspir-ing teacher and mentor. The triple threathas long served as both an ideal and an idolby which clinical faculty or physician scien-tists could calibrate their efforts and bywhich their contributions could be valuedand measured for the purposes of careeradvancement and academic promotion.

The third archetype, less universallyadmired, but nevertheless widely acceptedand cultivated within academia (and aca-demic medicine in particular), has beenthe strong, independent, charismatic, ego-centric, and often authoritarian or highlymaverick personality. These characteris-tics are often associated with legendary

figures in the history of medicine akin toBobby Knight or Woody Hayes of collegecoaching fame. The indomitable personal-ity is one whose combination of brillianceand independence of thought and eccen-tric (or worse) behavior are not toleratedor compatible with most organizations orinstitutions. In academia the combinationhas been, not only tolerated, but oftenrewarded by a series of increasingly seniorand prestigious appointments at a succes-sion of leading universities.

Each of these three academic archetypes,like the organization and managementsystems they support, is under consider-able strain. How these archetypes areaddressed will determine a great dealabout the viability of the change in theAHC and professional organization.

Culture is not something that youmanipulate easily. Attempts to grab itand twist it into a new shape neverwork. Culture changes only after youhave successfully altered people’sactions, after the new behavior pro-duces some group benefit for a peri-od of time, and after people see theconnection between the new actionsand the performance improvement.

– John P. Kotter, Leading Change, 1996

Overcoming Cultural Barriers

32

The first archetype, independence andoriginality, is being tested by both internaland external factors. Internally, as wehave described, the methodologies of sci-ence, and perhaps of important clinicaland educational processes, are converging.Faculty seek out collaborators across theentire spectrum of research, clinical care,and educational programming. Externally,public and private funds are increasinglyseeking to maximize return on investmentby choosing to support work that candraw on multidisciplinary sources ofexpertise. More and more progress in sci-ence, medicine, and education is occur-ring as a result of cross-disciplinary andcross-institutional collaboration, whetherepisodic or long-term and continuous.External factors also include market-based pressures that drive the need toreduce costs and create efficiencies ineach mission area, including the need tomaximize sharing of core facilities, instru-ments, and other critical resources, aswell as knowledge.

Clearly, progress in science, care, andeducation will continue to require inde-pendence and originality. So this under-pinning cannot be allowed to crumble;however, it is also clear that teamworkand collaboration are, and increasinglywill be, vital to scientific progress. It istherefore necessary to reform the arche-type so that it holds up both the develop-ment of the independent and originalinvestigator, and the demonstrated abilityto work collaboratively.

Internal and external forces are also challenging the second archetype, thetriple threat (Pellegrin and Arana, 1998).Increasingly, as people of diverse back-grounds and interests began to fill out

medical schools and faculties, the groundsfor promotion and advancement broad-ened and became more flexible. Newthinking has challenged the conventionalview of scholarship and has contributedto the development of a more sophisticat-ed understanding of the value of severalforms of scholarly activity (Boyer, 1990;Angstadt et al., 1998; Nora et al., 2000).At the same time, AHCs and medicalschools have developed along a variety ofpaths, with different emphasis on clinicalcare, education, or research. The relativevalue or importance of these characteris-tics and contributions now vary by insti-tution and by department within institu-tions. Consideration of academicadvancement normally depends uponexcellence in at least one mission area andsubstantial contributions in another.

The external forces threatening the triplethreat archetype have been even moredaunting than the internal forces. As themarket-driven environment imposes itselfon the AHC and health care, the neces-sary focus on faculty productivity and rev-enue generation has undermined this goldstandard. Administrators and faculty alikeface the increasing realization that thetriple threat no longer serves as a realisticstandard by which to measure the value ofclinical faculty. For increasing numbers ofclinical faculty, clinical productivity, inparticular, is becoming a de-facto proxyfor the value of their contributions as faculty members.

Nevertheless, the existing departmentalstructures and their policies largely haveyet to incorporate this new reality.Department chairs, deans, and peers con-tinue to send mixed and conflicting messages about standards for faculty

33

performance. Tenure and promotion stan-dards, particularly at the elite, research-centered AHCs, overwhelmingly retainthe traditional triple threat as an evalua-tive gold standard. Yet, specialization inone mission area with substantial expertiseand contributions in another is becomingthe new real standard. This new model ismore compatible with the progress of science and medicine and with the likeli-hood of ongoing success within academicand professional organizations.

While still representative of the highestattainment in the minds of some, the tra-ditional triple threat is becoming morelike an ideal than a real standard for thevast majority of faculty and schools.AHCs and the health professions shouldcultivate a new triple threat valued andrewarded for:

• Excellence in scholarship and/or achievement in one or more of the core academic mission areas: student-centered education, discovery-centered research, or care-centered research or innovation.

• Excellence in achievement and/or leadership in the core service mission: patient-centered care.

• Excellence in achievement and/or leadership in community, professional, and institutional service to measurably meet societal needs and aspirations for our health care system.

A triple threat built on standards likethese would be a worthy successor to theformer ideal.

The academy takes great pride infunctioning as a creative anarchy.

– James J. Duderstadt, A University for the 21st Century, 2000

34

The final archetype, ego-centrism withindependence of behavior, is also undersevere stress. Internally, deans and senioradministrators, not to mention depart-mental and other affected faculty, increas-ingly worry about the extent to whichintense competition among AHCs torecruit stellar individuals is both costlyand, in many cases, extremely disruptive.Recruitment packages can run into mil-lions of dollars in commitments.Recruiting high profile individuals andproviding them with outsized and bounti-ful resources, can be disruptive to depart-ments and even to whole institutions.Very often, appointments of stellar individ-uals to chairmanships and institute direc-torships have been made without regard tothe leadership or managerial capabilities ofthe individual. Five years later, the returnon this investment can end suddenly as thestar is recruited away by a new high bid-der. Meanwhile, rising stars within theorganization leave, or are recruited away, topursue other opportunities.

External forces eroding this part of theculture are the same market forces affect-ing the others. The new environmentfavors organization and leadership thatengenders commonality of purpose andoptimal knowledge worker and systemperformance. Independence and originali-ty of thought, the capacity to create team-work, inspire loyalty, and manage per-formance are increasingly prized andrewarded. Ego-centrism, authoritarianism,and independence of behavior are nolonger adaptive. They are increasinglycounterproductive.

The “Project Professionalism” of theAmerican Board of Internal Medicine

(ABIM) is a model of what professionalsocieties can do to promote a new, moreadaptive culture for 21st century healthcare. Established in 1992, the Projectdeveloped an enhanced definition of pro-fessionalism that has been adopted by theABIM. It identified eight elements of pro-fessionalism to be required of candidatesseeking specialty certification: altruism,accountability, excellence, duty, service,honor, integrity, and respect for others.Also identified were seven issues thatdiminish professionalism, including:abuse of power, arrogance, greed, misrep-resentation, impairment, lack of conscien-tiousness, and conflict of interest. ProjectProfessionalism then developed a programthat includes guidelines, forms, and othermaterials by which graduate medical edu-cation program directors and others learnto mentor and assess residents and candi-dates for certification. The ABIM projectis playing an important role in the formalincorporation of humanistic qualities intothe components of clinical competency(American Board of Internal Medicine,2001).

Leadership Development

The General Electric Company and manyother enterprises, both large and small,have a very different view of leadershipdevelopment and succession planning.They believe that routinely bringing innew leadership from the outside, as manyenterprises do, is often more disruptivethan successful.

At GE, leadership development and suc-cession planning are top priorities. Theidea of routinely recruiting top leadershipfrom outside the company is an anathe-

35

ma. Rather, they focus on developing thatleadership from within. They recruit individuals with high achievement andleadership potential and then invest yearsof learning and support to help ensurethat they develop it. Individuals soughtmust be strong and able to demonstratekey attributes: independent thought, abili-ty to manage individuals and inspire per-formance, and a talent for building suc-cessful teams. Individuals displayingarrogance, and the penchant for inspiringresentment, mistrust, jealousy, and otherde-motivating behaviors are either educat-ed or weeded out. Leaders are cultivatedthroughout the organization and aregroomed for what they, their supervisors,and their peers determine together are theappropriate leadership positions.

AHCs can no longer afford to reward ego-centric and authoritarian personalities,who cannot manage people or processeswell. The environment and the organiza-tion can no longer support this.

AHCs must build a new cultural arche-type that supports stellar, brilliant individ-uals with strong personalities who canlead change and inspire confidence andperformance among knowledge workersand peers. This new cultural archetypecan be built by developing a new focus onleadership development and successionplanning for key positions throughout theorganization, especially departmentchairs, deans, and other senior adminis-trative and business managers. Recruit-ment objectives for younger faculty shouldbe revised to include criteria for the iden-tification of potential future leaders. Suchinternal and occasionally external recruit-ment policies should be aligned with

faculty and staff leadership developmentprograms and integrated into departmen-tal and other administrative unit opera-tions and functions.

External recruitment for high leadershippositions need not be discontinued.National and international searches forthe best individual or team to fulfill a spe-cific leadership or other significant roleare effective. AHCs will, however, likelyexperience vast improvements in theirorganizational and leadership capabilitiesto the extent that such searches increas-ingly reveal that the best candidates are tobe found, because they have been culti-vated, within their own institutions.

36

Recommendations

• AHCs and health professional organi-zations should actively work to reform theircultures and archetypes of desirablebehavior.

• AHCs should supplement the cultureof the independent investigator with a cul-ture that supports demonstrated ability toestablish and be a significant contributorto, or leader of, fruitful and meaningful col-laborations and teams.

• AHCs should supplant the traditionalideal of the “triple threat” with one thatemphasizes:

• Excellence in scholarship and/or achievement in one or more of the core academic mission areas: student-centered education, discovery-centered research, or care-centered research or innovation.

• Excellence in achievement and/or leadership in the core service mission: patient-centered care.

• Excellence in achievement and/or leadership in community, professional, and institutional service in measurably meeting societal needs and aspirations for our health care system.

• AHCs should replace the archetype ofthe ego-centric, authoritarian, or otherwiseorganizationally dysfunctional personalityand cultivate a new standard that valuesthe stellar, brilliant individual with a strongpersonality who leads collective change,inspires confidence, and motivates per-formance among peers, other knowledgeworkers, and staff.

Action Steps

• AHCs should establish leadershipdevelopment and succession planningprograms that identify and develop thenew leaders in health care and biomedicalsciences necessary for creation of ahealth care system for the 21st century.

• AHCs and health professional societiesshould adopt, as a model set of profes-sional standards, the elements of theenhanced definition of professionalismdeveloped by the ABIM through its“Project Professionalism.”

Overcoming Cultural BarriersRecommendations and Action Steps

37

Conclusion

A new kind of health system is on thehorizon. It is the responsibility of theentire health community to make progresstoward the health system of the 21st cen-tury. Unlocking the promise of the newsystem will demand new ways of think-ing, new modes of working, and newkinds of skills for both professionals andorganizations. Optimal performance inthe evolving system will require that theexternal environment support health careorganizations through reimbursement andfunding mechanisms that reward qualitycare and create a national health informa-tion infrastructure. In turn, health careorganizations must support their staff bycreating an organizational culture andstructure that enable individual and insti-tutional excellence.

The Institute of Medicine has provided arallying point for the entire health caresystem and particularly for AHCs andhealth professionals as they seek to definea sound way forward. By focusing thepublic policy spotlight on the inadequacyof existing delivery systems and systemgoals, and in building on the knowledge,skills, and dedication of the healing pro-fessions, the IOM has articulated clearand powerful goals that both health pro-fessionals and our public can embrace. Itis now up to AHCs and their partnerswithin the health community to take tan-gible steps towards transforming thevision of a 21st century health systeminto a reality.

The Blue Ridge Group believes that AHCsshould begin by assessing their mission,goals, and performance against the goalsfor the new system. Where gaps exist,there are opportunities for realignment

and organizational reforms that seek totruly change organizational performance.AHCs should prepare for forthcomingchanges by ensuring that their organiza-tional structures foster flexibility and col-laboration. AHC organizational processesshould support faculty and staff throughclear expectations and robust humanresource functions. AHC culture, particu-larly its archetypes, should be updated toreflect contemporary needs of AHCs andthe health community.

The Blue Ridge Group also believes thatAHCs should be leaders in building avalue-driven health system for the 21stcentury. This leadership can take a varietyof forms. AHCs can lead by examplethrough their organizational changeefforts. AHCs can lead by conveying thenew vision to audiences throughout thehealth community. AHCs can help shapethe health policy agenda and decisionsthat will in turn determine how well theexternal environment supports healthorganizations and professions in the newsystem. AHCs can use their researchresources to translate the vision into prac-tice by expanding knowledge about whatconstitutes safe, effective, and efficientcare. Equally important, AHCs can helpcurrent and future professionals acquirethe skills they need to achieve excellentperformance consistently.

Absent strong leadership from AHCs andprofessional societies, the continuing tur-bulence in health care also threatens thepipeline of bright, idealistic young peoplewilling to choose a career in health care.The pool of medical school applicants andthe ratio of applicants to those acceptedcontinue to drop (AAMC, 2001). Nursing

38

and medical technician shortages abound.AHCs need to support organizational andcultural changes with comprehensivereforms in the entire spectrum of healthprofessions education – a subject that theBlue Ridge Group will address in a futurereport.

The last several decades have been a timeof great turbulence and stress for AHCsand health professionals. Now the healthcommunity stands at the beginning of anew era, one that could prove to bemomentous for the health and history ofthe nation. It is essential that AHCs notonly prepare themselves to succeed in thefuture environment, but to define it.

39

The Blue Ridge Academic Health Groupseeks to take a societal view of health andhealth care needs and to make recommen-dations to academic health centers to helpthem create greater value for society. TheBlue Ridge Group also recommends pub-lic policies to enable AHCs to accomplishthese ends.

Three basic premises underlie this mis-sion. First, health care in the UnitedStates is experiencing a series of transfor-mations that ultimately will require newapproaches in health care delivery sys-tems, education, and research. Second,the recent upheavals in health care havebeen largely driven by financial objec-tives. Yet the potential exists for funda-mental changes in health care to improvehealth and manage costs. Analysis andevaluation of the ongoing evolution inhealth care delivery must address thisimpact on the health of individuals andthe population, as well as on cost. Third,AHCs play a unique role in the U.S.health care system as they develop, apply,and disseminate knowledge to improvehealth. In so doing, they assume responsi-bilities and encounter challenges otherhealth care provider institutions do notbear. As a result, AHCs face greater risksand opportunities as the U.S. health caresystem continues to evolve.

The Blue Ridge Group was founded inMarch 1997 by the Virginia Health PolicyCenter (VHPC) at the University ofVirginia and the Health Market Unit lead-ership at Ernst & Young, LLP (now CapGemini Ernst & Young, CGE&Y). Groupmembers were selected to bring togetherseasoned, active leaders with a broadrange of experience in and knowledge ofacademic health centers in the United

States. Other participants are invited toBlue Ridge Group meetings to bring addi-tional expertise or perspectives on a spe-cific topic.

Blue Ridge Group members collectivelyselect the topics to be addressed at annualmeetings. Criteria for selection of reporttopics include relevance to AHCs’ opera-tions, consistency with AHCs providingvalue to society, the likelihood of beingable to make specific recommendationsthat will lead to productive action byAHCs or other organizations, and theability to frame useful recommendationsduring two-day meetings.

Before each meeting, an extensive litera-ture review is conducted. During themeeting, participants reflect on emergingtrends, share experiences from AHCs, andhear presentations on specific issues. Mostof the working session is dedicated to adiscussion of what AHCs can and shouldbe doing in a particular area to achievevisible progress, or a discussion of whatpublic and private policy and philanthrop-ic organizations can do to facilitate theefforts of AHCs to fulfill their societal mis-sion. The results of the group’s delibera-tions are presented in brief reports that aredisseminated to targeted audiences.

About the Blue Ridge Academic Health Group

40

David Blumenthal, M.D., M.P.P.DirectorInstitute for Health PolicyThe Massachusetts General HospitalProfessor of Medicine and Professor ofHealth Care Policy Harvard Medical School

Dr. Blumenthal is director, Institute forHealth Policy and physician at TheMassachusetts General Hospital/PartnersHealth Care System in Boston,Massachusetts. He is also professor ofmedicine and professor of health care pol-icy at Harvard Medical School. Dr.Blumenthal previously served as seniorvice president at Boston’s Brigham andWomen’s Hospital, as well as executivedirector of the Center for Health Policyand Management and lecturer on publicpolicy at the John F. Kennedy School ofGovernment at Harvard. Dr. Blumenthalis a member of the Institute of Medicineof the National Academy of Sciences andserves on several editorial boards, includ-ing The New England Journal of Medicine,American Journal of Medicine, Journal ofHealth Politics, Policy and Law, and theBulletin of the New York Academy ofMedicine. He serves on advisory commit-tees to the National Academy of Sciences,the Institute of Medicine, the NationalAcademy of Social Insurance, and severalfoundations. He is currently executivedirector for The Commonwealth FundTask Force on the Future of AcademicHealth Centers and chairman of the boardof the Massachusetts Peer ReviewOrganization. Dr. Blumenthal is also thefounding chairman of the Academy forHealth Services Research and HealthPolicy, the national organization of healthservices researchers.

Enriqueta C. Bond, Ph.D. President Burroughs Wellcome Fund

Dr. Bond is the president of the BurroughsWellcome Fund. She formerly held anumber of research and administrativepositions at the Institute of Medicine,National Academy of Sciences;Department of Medical Sciences, SouthernIllinois University School of Medicine;and the Biology Department at ChathamCollege. Dr. Bond also serves on severaladvisory committees and boards, some ofwhich include the Council of the Instituteof Medicine and the National Center forInfectious Diseases, Centers for DiseaseControl and Prevention. She has authoredand co-authored more than 50 publica-tions and reports in science policy.

Robert W. Cantrell, M.D.DirectorVirginia Health Policy Center University of Virginia Health System

Dr. Cantrell is director of the VirginiaHealth Policy Center. Previously, he wasvice president and provost for the HealthSystem at the University of Virginia. He isthe former president of the AmericanAcademy of Otolaryngology-Head andNeck Surgery. As a captain in the U.S.Navy, he served as chair ofOtolaryngology-Head and Neck Surgery atthe Naval Regional Medical Center in SanDiego, California. Dr. Cantrell was alsothe Fitz Hugh Professor and chair of theDepartment of Otolaryngology-Head andNeck Surgery at the University of VirginiaSchool of Medicine. He also has been aconsultant to the Surgeon General of theU.S. Navy and to the National Institutesof Health (NIH). Dr. Cantrell is a member

About the Core Members

41

or fellow of 33 otolaryngological societiesand has taken an active leadership role inmany, including the American College ofSurgeons, the American Society for Headand Neck Surgery, and the AmericanBroncho-Esophagological Association. Dr.Cantrell received the Mosher Award forclinical research, has published numerousarticles, and lectured nationally and inter-nationally.

Don E. Detmer, M.D.Dennis Gillings Professor of Health ManagementDirectorCambridge University HealthUniversity of Cambridge

Dr. Detmer heads the health policy andmanagement center within the JudgeInstitute of Management at CambridgeUniversity’s business school. He chairs theBoard on Health Care Services of theInstitute of Medicine and is a board mem-ber of several organizations, including theChina Medical Board of New York, theNuffield Trust in London, and theAmerican Journal of Surgery. He hasauthored numerous scientific publica-tions. Dr. Detmer earned his medicaldegree at the University of Kansas afterundergraduate studies there and atDurham University of England. He con-ducts his work with the Blue Ridge Groupthrough a professorship at the Universityof Virginia where in the past he served asvice president and provost for HealthSciences and University Professor.

Michael A. Geheb, M.D.Professor of Medicine and Senior VicePresident for Clinical ProgramsOregon Health Sciences University

Dr. Geheb is professor of medicine andsenior vice president for ClinicalPrograms at Oregon Health SciencesUniversity. Dr. Geheb has also served asprofessor of medicine, and was the firstdirector and chief executive officer of theUniversity of Alabama at BirminghamHealth System. Prior to that, Dr. Gehebwas associate dean for Clinical Affairs,and director of Clinical Services at theState University of New York at StonyBrook University Medical Center. Dr.Geheb is on the Board of Directors of theUniversity Hospital Consortium and theExecutive Committee of the AmericanBoard of Internal Medicine. Dr. Geheb isco-editor of the textbook Principles andPractice of Medical Intensive Care and co-editor for the Critical Care Clinics series.He also speaks frequently to nationalaudiences on health care policy issuesrelated to academic productivity andfinancial models for academic clinicalenterprises.

Jeff C. Goldsmith, Ph.D. PresidentHealth Futures, Inc.

Dr. Goldsmith’s consulting firm assists awide range of health care organizationswith environmental analysis and strategydevelopment. He is a director of CernerCorporation, a health care informaticsfirm, and of Essent Healthcare, a hospitalmanagement firm, as well as a member ofthe Board of Advisors of Burrill andCompany, a private merchant bank inbiotechnology and health sciences. He is

42

currently an associate professor of medical education at the University ofVirginia. He is a former lecturer in theGraduate School of Business at theUniversity of Chicago. He has also lec-tured on health services management andpolicy at the Harvard Business School, theWharton School of Finance, JohnsHopkins, Washington University, and theUniversity of California at Berkeley. Dr.Goldsmith has served as national advisorfor health care for Ernst & Young LLP,was director of Planning and GovernmentAffairs at the University of ChicagoMedical Center, and special assistant tothe dean of the Pritzker School ofMedicine. Dr. Goldsmith has written forthe Harvard Business Review and has beena source for articles on medical technolo-gy and health services for The Wall StreetJournal, The New York Times, BusinessWeek, Time, and other publications. He isa member of the editorial board of HealthAffairs. He earned his doctorate inSociology from the University of Chicagoin 1973.

Michael M.E. Johns, M.D.Executive Vice President for Health AffairsEmory UniversityDirectorThe Robert W. Woodruff Health Sciences CenterChairman of the Board and Chief Executive OfficerEmory Health Care

Dr. Johns heads Emory’s academic andclinical institutions and programs in thehealth sciences and is a professor in theDepartment of Surgery. A former dean ofthe Johns Hopkins School of Medicine, hewas professor and chair of theDepartment of Otolaryngology-Head and

Neck Surgery at Johns Hopkins. Beforethat he was assistant chief of theOtolaryngology Service at Walter ReedArmy Medical Center. Dr. Johns is amember of the Institute of Medicine, andthe Executive Council of the Associationof American Medical Colleges and a fel-low of the American Association for theAdvancement of Science. He serves on theGoverning Boards of the NationalResearch Council and the Clinical Centerof the National Institutes of Health, andon the advisory committee of the directorof the Centers for Disease Control andPrevention. He is the president of theAmerican Board of Otolaryngology, editorof the Archives of Otolaryngology-Head andNeck Surgery, and a member of the Boardof Trustees of Genuine Parts Company.Dr. Johns received his bachelor’s degreeand continued with graduate studies inbiology at Wayne State University. Heearned his medical degree at the Universityof Michigan School of Medicine.

Peter O. Kohler, M.D. PresidentOregon Health Sciences University

Dr. Kohler is president of Oregon HealthSciences University. After holding posi-tions at the National Institutes of Health(NIH), he became professor of medicineand chief of the Endocrinology Divisionat Baylor College of Medicine. Later, heserved as chairman of the Department ofMedicine at the University of Arkansasand then as dean of the Medical School atthe University of Texas Health ScienceCenter in San Antonio. Dr. Kohler hasserved on several boards. He has beenchairman of the NIH EndocrinologyStudy Section and chairman of the Boardof Scientific Counselors for the National

43

Institute of Child Health and HumanDevelopment. Dr. Kohler is a member ofthe Institute of Medicine and chaired therecent task force on improving the qualityof long-term care. He is past-chair of theBoard of Directors of the Association ofAcademic Health Centers. Dr. Kohlerreceived his bachelor of arts from theUniversity of Virginia and earned hismedical degree at Duke Medical School.

Edward D. Miller, Jr., M.D.Dean and Chief Executive OfficerJohns Hopkins MedicineThe Johns Hopkins University

Dr. Miller is chief executive officer ofJohns Hopkins Medicine. His formerposts include chairman of the Departmentof Anesthesiology and Critical CareMedicine; Interim dean of the School ofMedicine; professor of anesthesiology andsurgery and medical director of theSurgical Intensive Care Unit at theUniversity of Virginia; E.M. PapperProfessor at Columbia University; andchairman of the Department ofAnesthesiology in the College ofPhysicians and Surgeons. Dr. Miller hasauthored and co-authored more than 150scientific abstracts and book chapters. Hereceived his bachelor of arts from OhioWesleyan University and his medicaldegree from the University of RochesterSchool of Medicine and Dentistry.

Jeffrey Otten, M.A., M.B.A.PresidentBrigham and Women’s Hospital

Mr. Otten is president of Brigham andWomen’s Hospital where he previouslyserved as executive vice president andchief operating officer. He has held senior

leadership positions at the Hospital of theUniversity of Pennsylvania inPhiladelphia, UCLA Medical Center inLos Angeles, Los Angeles County – USCMedical Center, and Harbor – UCLAMedical Center. Mr. Otten has taught atCalifornia State University Los Angeles,UCLA, Wharton, and the Harvard Schoolof Public Health. He is director of corpo-rate development of the MassachusettsHeart Association, chair-elect of the Boardof Trustees of the Greater Boston FoodBank, a member of the Boston 2000Consortium, and chair and executivecommittee member of UniversityHealthsystems Consortium. Mr. Ottenalso serves on the Board of the Council ofTeaching Hospitals at the Association ofAmerican Medical Colleges. He received aMaster of Arts degree in 1975 and aMaster of Business Administration degreein 1983 from the University of Californiaat Los Angeles.

Mark L. Penkhus, M.H.A., M.B.A.Executive Director andChief Executive OfficerVanderbilt University Hospital

Mr. Penkhus is chief executive officer andexecutive director of Vanderbilt UniversityHospital. Prior to joining Vanderbilt, Mr.Penkhus was a partner and business unitleader for Healthcare Consulting (Mid-Atlantic area) in Washington D.C. forErnst and Young LLP, and served as anational leader for academic health cen-ters. During his career, he has workedwith a variety of organizations as an inno-vator, and change agent with a specialemphasis on strategic, operational, andfinancial performance improvement. Mr.Penkhus received a bachelor of sciencedegree from Iowa State University, a

44

master’s degree in Hospital and HealthCare Administration from the Universityof Iowa, and a masters of business admin-istration from Rensselaer PolytechnicInstitute in New York. He is also a gradu-ate of the Advanced ManagementProgram, Wharton School of Business, at the University of Pennsylvania. He is a fellow of the American College ofHealthcare Executives (ACHE), a fellowin Project HOPE, Washington D.C., and amember of the Johns Hopkins UniversitySchool of Hygiene and Public Health,Department of Health Policy andManagement. Mr. Penkhus serves on several non-profit and for-profit boards in Tennessee and nationally.

Paul L. Ruflin, M.B.A. Vice PresidentHealth/Managed Care Consulting PracticeCap Gemini Ernst & Young U.S., LLC

Mr. Ruflin leads the health/managed careconsulting practice for Cap Gemini Ernst& Young U.S., LLC (CGE&Y) and isresponsible for all business developmentand service delivery to CGE&Y’s provider,managed care, and health/technologyclients. He has more than twenty years ofhealth care consulting experience with afocus on developing and implementingstrategies to transform health organiza-tions including major providers and aca-demic medical centers. He previouslyserved as director for business transfor-mation services for the health consultingpractice where he had national responsi-bilities for operations improvement, merg-er integration, turnaround, medical man-agement, physician practice management,supply chain, clinical improvement, andbenefits realization services. Mr. Ruflin isa CPA, and holds a masters of business

administration from Bowling Green StateUniversity and a bachelor of arts inAccounting from Walsh College. He is amember of AICPA, Ohio Society of CPAs,Hospital Information ManagementSystems Society, and Healthcare FinancialManagement Association.

George F. Sheldon, M.D.Scholar in ResidenceBurroughs Wellcome Fund

Dr. Sheldon’s background in graduatemedical education spans four institutions:Kansas University, Mayo Clinic,University of California at San Francisco,and Harvard University. He is currentlyscholar in residence at the BurroughsWellcome Fund. Previously he was chair-man and professor, Department of Surgeryat the University of North Carolina atChapel Hill and professor of surgery inthe Department of Surgery at theUniversity of California, San Francisco.He is a member of the Royal College ofSurgeons of England and Scotland. Dr.Sheldon has served as president of theAmerican Surgical Association, chairmanof the American Board of Surgery, memberof the Council on Graduate MedicalEducation, president of the AmericanCollege of Surgeons, chair of the Councilof Academic Societies of the Associationof American Medical Colleges, and chairof the Association of American MedicalColleges. He has published 195 articlesand book chapters and co-authored eightbooks.

45

Katherine W. Vestal, Ph.D.Vice PresidentHealth Consulting Practice Cap Gemini Ernst & Young U.S., LLC

Dr. Vestal leads the academic health cen-ter sector for Cap Gemini Ernst & Young’s(CGE&Y) health consulting practicewhere she focuses on large-scale organiza-tional change for a wide range of healthcare delivery organizations. Prior to joining CGE&Y, Dr. Vestal held severalexecutive positions in academic healthcenters and taught at the graduate level atthe University of Texas. Her backgroundincludes more than 25 years of operations

management and consulting in the areasof business transformation, post-mergerintegration, and clinical management. She speaks nationally on issues of organi-zational improvement and is a MalcolmBaldrige National Quality AwardExaminer. Dr. Vestal received a bachelorof science in nursing from Texas ChristianUniversity, a master of science from TexasWomen’s University, and a doctor of philosophy from Texas A & M University.She is a Fellow of the Johnson andJohnson Wharton School of Finance,American College of HealthcareExecutives, and the American Academy of Nursing.

46

Haile T. Debas, M.D.Dean, School of MedicineVice Chancellor for Medical AffairsUniversity of California, San Francisco

Dr. Debas is dean of the School ofMedicine and serves as vice chancellor formedical affairs at the University ofCalifornia, San Francisco. He previouslyserved as chair of the Department ofSurgery at UCSF and he currently holdsthe Maurice Galante DistinguishedProfessorship of Surgery there. Dr. Debashas served on the editorial boards of sev-eral journals including Gastroenterology,American Journal of Physiology, andAmerican Journal of Surgery. He has servedas a director of the American Board ofSurgery and a member of the governingboard of the American GastroenterologicalAssociation; and as president of theSociety of Black Academic Surgeons, theInternational Hepato-Biliary-PancreaticAssociation, and the Association forAcademic Minority Physicians. He is amember of the Institute of Medicine,National Academy of Sciences and a fel-low of the American Academy of Arts andSciences. He serves on the executiveboard of the Association of AmericanMedical Colleges and the membershipcommittee of the Institute of Medicine. In2001, he was elected president of theAmerican Surgical Association. Dr. Debasreceived his medical degree from McGillUniversity.

Tipton FordSenior ManagerCap Gemini Ernst & YoungHealth Care Consulting

Mr. Ford is a senior practitioner in CapGemini Ernst & Young’s national academ-ic medicine and physician services con-sulting practice. He has over 19 years ofindustry and consulting experience. Mr.Ford consults exclusively with academichealth centers, independent teaching hos-pitals, and indigent care providers. Hismajor areas of consulting services includeacademic department finance and opera-tions, graduate medical education pro-gram financing and operations, affiliationagreement design, faculty physician prac-tice operations, faculty compensation plandesign and implementation, large-scaleoperations and finance turn-around man-agement, and research program financialmanagement. Mr. Ford is a member of theMedical Group Management Association,Academic Practice Assembly, Associationof American Medical Centers, andAccreditation Council for GraduateMedical Education. He received a bache-lor of arts from Xavier University.

Arthur Garson, Jr., M.D., M.P.H.Senior Vice President and Dean forAcademic OperationsBaylor College of Medicine

Arthur Garson, Jr., is senior vice presidentand dean for Academic Operations atBaylor College of Medicine in Houston.He is also vice president of TexasChildren’s Hospital with line responsibili-ty for quality, outcomes, and accreditationfor the Integrated Delivery System includ-ing medical management, physician, and

About the Invited Participants

47

clinic performance. Dr. Garson currentlychairs the National Heart, Lung, andBlood Institute Panel on CardiovascularResearch in the Young. He currently holdsor previously held the following positions:the Agency for Healthcare Research andQuality National Advisory Council;American College of Cardiology: presi-dent, board of trustees, CMEDevelopment Committee chairman;American Medical Association: RelativeValue Update Committee (RUC) forRBRVS; American Academy of Pediatrics:Committee on Child Health Financing;North American Society of Pacing andElectrophysiology; board of trustees, edi-tor for the U.S. and Canada of the journalCardiology in the Young; Editorial Boards:Circulation, Journal of the American Collegeof Cardiology, American Journal ofCardiology, Pacing and ClinicalElectrophysiology, Journal of CardiovascularElectrophysiology; Food and DrugAdministration Cardiorenal AdvisoryCommittee; NIH Small BusinessInnovative Research (SBIR) Study Sectionmember; NIH Individual NationalResearch Service Award Study Sectionmember; Institute of Medicine Conflict ofInterest Panel and Congressional Office of Technology Assessment DefensiveMedicine Review Panel. He is the authorof more than 450 publications including 7books. Dr. Garson graduated fromPrinceton University in 1970 and receivedhis medical degree from Duke Universityin 1974.

John LynchVice President, Global Human ResourcesGeneral Electric Medical Systems

John Lynch is the vice president, GlobalHuman Resources, for GE MedicalSystems, based in Milwaukee, Wisconsin.After graduating from University inScotland, Mr. Lynch worked in a series ofincreasingly responsible HR roles for oneof the U.K.’s major finance houses for 18years. He joined GE in 1991 as HR man-ager for the U.K. Auto Finance businessof GE Capital. In 1994, he was promotedto HR leader for GE Capital RetailerFinance – Europe and the following yearmoved to Stamford, Conneticut as seniorHR leader for GE Capital GlobalConsumer Finance. John was appointedan officer of General Electric Companyand took up his current assignment withMedical Systems in May 2001.

Appendix

Baylor Metrics 2001

49

50

Baylor Metrics 2001Clinical Departments

Patient Care

1. Private Patient Care RVUs

The RVU (Relative Value Unit) describeshow much time and effort a physicianspends performing a service: a routineclinic visit is approximately 1 RVU where-as heart surgery receives 30 RVUs. This isa measure of how much activity all physi-cians perform; the higher the number ofRVUs, the more outpatient visits and procedures are performed.

2. Private Patient Care RVUs Per PrivatePatient Care FTE

This is an efficiency measure, indicatinghow efficiently physicians spend theirtime while seeing private patients. Thenumber of RVUs are divided by the num-ber of Full Time Equivalents (FTE) devot-ed to private patient care (excludingHarris County and the VA hospital). Eachphysician spends a certain percentage oftheir time seeing private patients – forexample, if he/she spends one day perweek out of five, this is 20% or 0.2 FTE.If the number of RVUs is divided by thepatient care FTE, this normalizes thepatient care activity to what a 100%physician would spend.

The Medical Group ManagementAssociation (MGMA) has benchmark dataon private practice physicians throughoutthe U.S. We have chosen this measure as abenchmark for our physicians. For exam-ple, if the department of Otolaryngologyis greater than 90th percentile for MGMA,this means that Baylor physicians seepatients more efficiently than 90% of private otolaryngologists.

3. Private Patient Care Expense Per RVU

This is the expense per service. Alldepartment expenses related to privatepatient care (e.g., physician salary andfringe, staff, supplies, etc.) divided byRVU. Given the different incomes ofphysicians, the expense per RVU cannotbe meaningfully compared across depart-ments. However, the percent change fromone year to the next in the same depart-ment is a measure of change in resourceutilization.

4. Patient Satisfaction – Patient-Physician Relationship

An outpatient survey is administered bytelephone quarterly. Seven of the ques-tions relate to the physician (for example:competency, caring, enough time spentwith the patient). This number is theoverall patient assessment of the physi-cian. The maximum is 100.

5. Patient Satisfaction – Process Of Care

In the same survey, questions are askedabout “process,” such as: time to get anappointment, parking, courtesy of thestaff, billing. This number is the overallassessment of the process. The maximumis 100.

Research

6. Basic Science Laboratory GrantDollars Per Basic Science LaboratorySquare Foot

This is a measure of the efficiency of useof basic science or “bench” laboratory space. The grant dollars are those used to perform basic science – for the most partthose investigations requiring animals,genes, chemicals, microscopes, etc. Thetotal grant dollars (direct dollars to theinvestigator plus the indirect dollars tothe institution) are used. The square feetused are those for investigators’ basic sci-ence laboratories and other shared labora-tory support space such as cold rooms.Values more then approximately $350 persquare foot indicate crowded laboratories.

7. Grant And Contract Dollars PerResearch FTE

This is a measure of the productivity ofresearchers. Both basic research (definedabove in #6) and clinical research (gener-ally research on individual patients suchas taking blood pressure, giving drugs, orthe support of such research, for exampleby data collection or computer modeling)are included. The number of grant dollarsare divided by the number of Full TimeEquivalents (FTE) devoted to research.Each researcher spends a certain percent-age of their time doing research – forexample, if he/she spends three days perweek out of five, this is 60% or 0.6 FTE.If the number of grant dollars is dividedby the research FTE, this normalizes theresearch activity to what a 100%

researcher would spend. This amount offunding (>$400,000 per Research FTE)implies that, on average for the depart-ment, each research faculty member holdsmore than one grant.

Education

8. Learner Evaluation

Periodically (whether after a single lecture,or after a month with a physician or a yearwith a mentor), learners (medical stu-dents, graduate students, residents, etc.)are given the opportunity to evaluate theirteachers. The evaluation form is similarfor each type of learning, and each asksthe overall evaluation of the teacher on ascale of 1-7 with 7 being the highest. Thismetric is the average of every evaluationreceived by faculty in the department.

Finance

9. Budget

Each year, each department submits abudget for the upcoming fiscal year. If, atthe end of the year, the actual revenueminus expense (overall – all business seg-ments) exceeded the prediction, the goalwas exceeded.

10. Revenue Less Expense > 0

If, at the end of the year, the overall rev-enue less expense was greater than zero(regardless of the prediction), the goalwas exceeded.

51

52

Baylor Metrics 2001Basic Science Departments

Research

1. NIH Grant Dollars Per Tenure TrackFaculty

For basic scientists, one important meas-ure of the quality of research is whetherthe National Institutes of Health is fund-ing that grant. Since basic science depart-ments are made up almost exclusively ofindividuals performing basic science, it isa goal for each tenure-track faculty mem-ber to be funded by the NationalInstitutes of Health. While also true in theclinical departments, there are prestigiousfunding sources for clinical research thatmight come from other sources, and sothis is not a metric for clinical depart-ments. This amount of funding(>$350,000 per faculty member) impliesthat, on average for the department, eachtenure track investigator holds more thanone NIH grant.

2. Basic Science Laboratory GrantDollars Per Basic Science LaboratorySquare Foot

This is a measure of the efficiency of useof basic science or “bench” laboratoryspace. The grant dollars are those used toperform basic science – for the most partthose investigations requiring animals,genes, chemicals, microscopes, etc. Thetotal grant dollars (direct dollars to theinvestigator plus the indirect dollars tothe institution) are used. The square feetused are those for investigators’ basic sci-ence laboratories and other shared labora-tory support space such as cold rooms.Values more then approximately $350 persquare foot indicate crowded laboratories.

3. Grant And Contract Dollars PerResearch FTE

This is a measure of the productivity ofresearchers. Both basic research (definedabove in #6) and clinical research (gener-ally research on individual patients suchas taking blood pressure, giving drugs, orthe support of such research, for exampleby data collection or computer modeling)are included. The number of grant dollarsare divided by the number of Full TimeEquivalents (FTE) devoted to research.Each researcher spends a certain percent-age of their time doing research – forexample, if he/she spends three days perweek out of five, this is 60% or 0.6 FTE.If the number of grant dollars is dividedby the research FTE, this normalizes theresearch activity to what a 100%researcher would spend. This amount offunding (>$400,000 per Research FTE)implies that, on average for the depart-ment, each research faculty member holdsmore than one grant.

4. Learner Evaluation: GraduateStudents and Medical Students

Periodically (whether after a single lecture,or after a month with a physician or a yearwith a mentor), learners (medical stu-dents, graduate students, residents, etc.)are given the opportunity to evaluate theirteachers. The evaluation form is similarfor each type of learning, and each asksthe overall evaluation of the teacher on ascale of 1-7 with 7 being the highest. Thismetric is the average of every evaluationreceived by faculty in the department.

Graduate students rate teachers statisticallylower than do medical students, hence theseparate metrics.

Finance

5. Budget

Each year, each department submits abudget for the upcoming fiscal year. If, atthe end of the year, the actual revenueminus expense (overall – all business seg-ments) exceeded the prediction, the goalwas exceeded.

6. Revenue Less Expense > 0

If, at the end of the year, the overall rev-enue less expense was greater than zero(regardless of the prediction), the goalwas exceeded.

53

54

AAMC. 2001. Medical school applicantpool continues to decline. AAMCSTAT.November 4. Online at www.aamc.org/newsroom/aamcstat/aamcnews.htm.

American Board of Internal Medicine.2001. Project Professionalism.Philadelphia: American Board of InternalMedicine Publications. Online atwww.abim.org.

Angstadt, C. N., Nieman, L. Z.,Morahan, P. S. 1998. Strategies to expandthe definition of scholarship for thehealth professions. Journal of Allied Health27 (3): 157-61.

Aschenbrener, C. A. 1998. Leadership,culture, and change: critical elements fortransformation. In Mission Management: ANew Synthesis, Volume 2, E. R. Rubin, ed.Washington, D.C.: Association ofAcademic Health Centers.

Balas, E. A. 2001. Information systemscan prevent errors and improve quality.Journal of the American Medical InformaticsAssociation 8 (4): 398-9.

Blake, D. A. 1996. Whither academic val-ues during the transition from academicmedical centers to integrated health deliv-ery systems? Academic Medicine 71(8):818-9.

Bloom, S. W. 1998. Structure and ideolo-gy in medical education: an analysis ofresistance to change. Journal of Health andSocial Behavior 29: 294.

Blue Ridge Academic Health Group.1998a. Academic Health Centers: GettingDown to Business. Washington, D.C.: CapGemini Ernst & Young U.S., LLC.

Blue Ridge Academic Health Group.1998b. Promoting Value and ExpandedCoverage: Good Health is Good Business.Washington, D.C.: Cap Gemini Ernst &Young U.S., LLC.

Blue Ridge Academic Health Group.2000a. Into the 21st Century: AcademicHealth Centers as Knowledge Leaders.Washington, D.C.: Cap Gemini Ernst &Young U.S., LLC.

Blue Ridge Academic Health Group.2000b. In Pursuit of Greater Value: StrongerLeadership in and by Academic HealthCenters. Washington, D.C.: Cap GeminiErnst & Young U.S., LLC.

Blue Ridge Academic Health Group.2001. e-health and the Academic HealthCenter in a Value-driven Health CareSystem. Washington, D.C.: Cap GeminiErnst & Young U.S., LLC.

Blumenthal, D. 1997. The future of quali-ty measurement and management in atransforming health care system. JAMA278 (19): 1622-25.

Blumenthal, D., Causino, N., Campbell,E. G., and Weissman, J. S. 2001. Therelationship of market forces to the satis-faction of faculty at academic health cen-ters. American Journal of Medicine 111 (4):333-340.

Boyer, E. L. 1990. ScholarshipReconsidered: Priorities of the Professoriate.Princeton, NJ: Carnegie Foundation forthe Advancement of Teaching.

References

55

Bulger, R. J., Osterweis, M., and Rubin,E., eds. 1999. Mission Management: A NewSynthesis. Washington, D.C.: Associationof Academic Health Centers.

D’Alessandri, R. M., Albertsen, P.,Atkinson, B. F., Dickler, R. M., Jones, R. F., Kirch, D. G., Longnecker, D. E.,McAnarney, E. R., Parisi, V. M., Selby, S. E., Stapczynski, J. S., Thompson, J.W., Wasserman, A. G., and Zuza, K. L.2000. Measuring contributions to theclinical mission of medical schools andteaching hospitals. Academic Medicine 75(12): 1231-1237.

Drucker, P. F. 1996. The Executive inAction. New York: Harper Business Press.

Drucker, P. F. 1999. ManagementChallenges for the 21st Century. New York:Harper Business Press.

Drucker, P. F. 1994. Post-Capitalist Society.New York: Harper Business Press.

Durkheim, E. 1966. Suicide: A Study inSociology. New York: The Free Press.

Durkheim, E. 1964. The Division of Laborin Society. New York: The Free Press.

Duderstadt, J. J. 2000. A University for the21st Century. Ann Arbor: The Universityof Michigan Press.

Eisenberg, L. 1999. Whatever happenedto the faculty on the way to the Agora?Archives of Internal Medicine 159 (19):2251-6.

Garson, A. 1999. Performance measuresand our “art.” Journal of the AmericanCollege of Cardiology 34: 607-9.

Hoffman, C., Rice, D. P., and Sung, H. Y.1996. Persons with chronic conditions:their prevalence and costs. JAMA 276(18): 1473-9.

Holmes, E. W., Burks, T. F., Dzau, V.,Hindery, M. A., Jones, R. F., Kaye, C. I.,Korn, D., Limbird, L. E., Marchase, R. B., Perlmutter, R., Sanfillipo, F., andStrom, B. L. 2000. Measuring contribu-tions to the research mission of medicalschools. Academic Medicine 75 (3): 303-13.

Institute of Medicine. 1999. To Err IsHuman: Building A Safer Health System.Washington, D.C.: National AcademyPress.

Institute of Medicine. 2001. Crossing theQuality Chasm: A New Health System forthe 21st Century. Washington, D.C.:National Academy Press.

Johns, M. E. and Niparko, J. K. 1996.Averaging excellence out? Archives ofOtolaryngology Head Neck Surgery 122(10): 1039-40.

Kataria, S. 1998. The turmoil of academicphysicians: what AMCs can do to ease theirpain. Academic Medicine 73 (7): 728-30.

Korn, D. 1996. Reengineering academicmedical centers: reengineering academicvalues? Academic Medicine 71 (10): 1033-43.

Kotter, J. P. 1996. Leading Change. Boston:Harvard Business School Press.

Ludmerer, K. M. 1999. Time to Heal:American Medical Education from the Turnof the Century to the Era of Managed Care.New York: Oxford University Press.

56

Lynch, J. 2001. Leveraging Leadership toDrive Growth at GE. Presentation to theBlue Ridge Academic Health Group. July.

McKinlay, J. and Arches, J. 1985.Towards the Proletarianization ofPhysicians. International Journal of HealthServices 15 (2): 161-95.

Medical Education Panel Survey. 2000.MEPS HC-006R: 1996 MedicalConditions. Online athttp://www.meps.ahrq.gov/catlist.htm.

Murphy, K. M. and Topel, R. 1999. TheEconomic Value of Medical Research. NewYork: The Lasker Foundation.Online at http://www.fundingfirst.org/reports/reports.html.

Nora, L. M., Pomeroy, C., Curry, T. E.,Hill, N.S., Tibbs, P. A., and Wilson, E. A.2000. Revising appointment, promotion,and tenure procedures to incorporate anexpanded definition of scholarship: theUniversity of Kentucky College ofMedicine experience. Academic Medicine75 (9): 913-924.

Pellegrin, K. L. and Arana, G. W. 1998.Why the triple threat approach threatensthe viability of academic health centers.Academic Medicine 73 (2): 123-25.

Relman, A. S. 1994. The health careindustry: where is it taking us? In TheNation’s Health (4th Edition), Lee, P. R.and Estes, C. L. London: Jones andBartlett Publishers.

Rice, D. P. 1994. Health status andnational health priorities. In The Nation’sHealth (4th Edition), Lee, P. R. and Estes,C. L. London: Jones and Bartlett Publishers.

Rouan, G. W. and Wones, R. G. 1999.Rewarding teaching faculty with a reim-bursement Plan. Journal of GeneralInternal Medicine (14) 6: 327-332.

Senge, P., Kleiner, A., Roberts, C., Ross,R., Roth, G., and Smith, B. 1999. TheDance of Change: The Challenges toSustaining Momentum in LearningOrganizations. New York: Doubleday.

Stewart, T. A. 1997. Intellectual Capital:The New Wealth of Organizations. NewYork: Doubleday.

Sussman, A. J., Fairchild, D. G., Coblyn,J., and Brennan, T. A. 2001. Primary carecompensation at an academic medicalcenter: a model for the mixed-payer envi-ronment. Academic Medicine 76 (7): 693-9.

Task Force on Academic Health Centers.2000. Managing Academic Health Centers:Meeting the Challenges of the New HealthCare World. New York: TheCommonwealth Fund. Online atwww.cmwf.org.

Wagner, E. H. 2000. The role of patientcare teams in chronic disease manage-ment. British Medical Journal 320 (7234):569-72.

Weissman, J. S. and MacDonald, E. A.2001. Current Findings on the FinancialStatus of Academic Health Centers.Presentation to the Commonwealth FundTask Force on Academic Health CentersSpring Meeting, April 27.

If you would like to order more copies of this publication – or any of the others listedbelow – please contact Sharen Olson at Emory University: email solson@emory.edu ortelephone at (404) 778-2968.

When requesting publications, please refer to the report number and title and provideyour full name, organization name, business address, city, state, zip, telephone, and email.

Report 6 – Creating a Value-driven Culture and Organization in the Academic Health Center

Report 5 – e-Health and the Academic Health Center in a Value-driven Health Care System

Report 4 – In Pursuit of Greater Value: Stronger Leadership in and by Academic Health Centers

Report 3 – Into the 21st Century: Academic Health Centers as Knowledge Leaders

Report 2 – Promoting Value and Expanded Coverage: Good Health is Good Business

Report 1 – Academic Health Centers: Getting Down to Business

Blue Ridge Academic Health Group ReportOrdering Information

Ret

rieva

l File

No.

CG

EY

– A

M07

6