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Pediatric Hospitals' and Physician Strategies for the 21st Century

Russell W. Chesney, MD

Rose Mary Stocks, MD, PharmD

James Shmerling, BA, MBA

Paul Herron, BA, MBA

Department of Otolaryngology and Pediatrics, The University of Tennessee College of Medicine, Le Bonheur Children's Medical Center, The Crippled Children's Foundation Research Center, Memphis, TN

Changes in market-driven health care economics are rapid and of great magnitude. This report describes a study of some of these changes in regard to children's health issues. We used a survey tool to assess long-range plans (next 10 years) and marketing strategies for major freestanding children's hospitals in different regions of the United States. We then used these assessments to draw conclusions about the impact of the plans and strategies on the practice of pediatric physicians and their workforce requirements. This may allow pediatric specialists and their programs to develop strategic plans and to take actions to contend with these market-driven economic changes. The tool was a questionnaire mailed to chief executive officers of 30 randomly chosen but geographically well-distributed children's hospitals. Seventeen children's hospitals responded (57%), providing information concerning each hospital and its current medical economic environment. The data were analyzed and trends were then identified from their responses. All institutions in this study expected to have fewer physicians on staff in the future. These institutions plan: (1) to improve quality and (2) to reduce costs. Quality will be improved by utilizing Continuous Quality Improvement (CQJ) and/or Benchmarking to Best Practices, both of which encourage physicians to follow standardized treatment protocols. Costs will be reduced by decreasing hospital staff size. Some children's hospitals have merged or will merge with larger, fullservice adult hospitals, but most plan to remain autonomous. Many expect a continued decrease in revenues, and almost all expect to downsize both bed number and staff. Restructuring will reduce the number of specialists, particularly in the fields of hematology-oncology, psychiatry, endocrinology, nephrology, and cardiology, and will also reduce the number of surgical specialists. The administrators predicted that more nurse practitioners will be employed at these hospitals in the 21st century, serving the role of physician extenders, if not physician substitutes. To ensure their own survival, physicians must develop their own strategic plans as have the hospitals in which they practice. Optimally they should embrace those activities that parallel their hospital's efforts such as Quality Improvement (CQI, Benchmarking), cost containment, and practice mergers.

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