Medical Professionals VS Economists: Who is Better in Running Hospitals?
At the latest with the entry into force of the Hospital Structure Act (KHSG), it became clear that the legislator wanted to focus more strongly on the quality of treatment in German hospitals. In the future, there will be financial increases or reductions in remuneration in the event of exceptionally good or insufficient quality. As a result, hospitals must move more towards quality and patient benefit, not to mention security trends like hospital access control – and still work as efficiently as possible. The staffing of the management is of central importance here. Following various empirical studies, they can influence around 30 percent of the company’s success through their position and actions.
High expectations for physicians
Against this background, the proposal is regularly made to fill top management positions in hospitals increasingly with physicians – the experts of core performance. The assumption is that medically trained business leaders have a positive influence on the quality of care, for example, due to their clinical expertise, a more patient-centered view, and higher trust on the part of employees.
Similar developments can be observed in other industries. For example, chemical companies are often run by scientists, and football clubs by former players. Again, it is argued that business leaders need to master the underlying business. Despite this positive perception, however, the proportion of medically trained hospital managers nationally and internationally remains below five percent. The majority have an academic education in the field of economics.
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Evidence is limited
The question of the influence of physicians in the top management of hospitals on their performance has already been investigated several times. In fact, it is becoming apparent that medical commitment goes hand in hand with better-quality of treatment. How economic success changes, on the other hand, has rarely been the subject of investigation; the evidence is correspondingly limited. A simultaneous evaluation of the medical and financial performance of hospitals, as Michael Porter calls for in his Value Framework, hardly takes place.
For this reason, health economists at the University of Bayreuth have investigated for the first time what influence the type of training of managing directors has on the quality of treatment and the economic success of German hospitals (the recording year 2016). With 370 institutions, the study includes the world’s largest sample for a single country. Indicators of process and result quality as well as patient satisfaction and financial performance were recorded. This broad spectrum makes it possible to draw a much more differentiated picture of the supply situation than was previously possible.
Economists achieve higher economic success
The results of the research show that hospitals with economists in management achieve better financial performance, expressed by higher profit margins. The assumption in the literature is that this advantage results, among other things, from comparatively better teaching of conceptual competencies within academic education. This includes, for example, strategic and holistic decision-making. Thus, the expert status of physicians can limit them in achieving a balanced target weighting in the field of tension between treatment quality and costs.
Furthermore, adverse results in the area of process organization in facilities run by physicians are emerging. This manifests itself in longer preoperative waiting times for surgical procedures or a less rigorous implementation of medical guidelines, for example in the area of mobilization of patients with pneumonia. As previous studies have shown, these factors do not necessarily lead to poorer quality results. However, they point to inefficient or inconsistent procedures that can result in higher treatment costs.