Abstract
BACKGROUND:
Management by Objectives (MbO) has been shown to establish efficient team work in both industry and medicine. Its most important prerequisite for success is target agreements between managers and medical professionals on equal footing. In medicine, lump-sum financing urges the delivery of a health care service with minimal effort. Consequently, daily clinical life changed, with economic goals seeming to become priority over medical principles.
OBJECTIVE:
To determine how well MbO can still be practiced in hospitals with lumped treatment prices.
METHODS:
We used an anonymized questionnaire for already retired physician executives who completed their active leadership positions between 2010 and 2015 in Saxony (Germany). We asked various type of target agreements that had been used in order to achieve medical or economic targets.
RESULTS AND CONCLUSIONS:
Out of 111 former executives, the questionnaires of 25 respondents could be analysed. Eight respondents confirmed target agreements that were mostly set by managing directors. If used, most targets had not been adapted to the infrastructure and personnel strength, nor were they coordinated with neighbouring departments. Four respondents received financial incentives. Most medical executives were unsatisfied and preferred to abandon further goal setting. Due to the low number of cases, the representativeness of the study is limited. Nevertheless, it might be questioned if a flat-rate remuneration system facilitates the change into an authoritarian leadership concept.
Abbreviations
Diagnosis Related Groups
Management by Objectives
Management by Sustainability
Specific, measurable, attainable, realistic, time-bound
Introduction
In a lump sum financing system (German Diagnosis Related Groups [G-DRG]) medical services more often follow their proceeds. This principle is a rational response, particularly in the case of a “dual-financing-system,” where federal states retire from supporting long-term investments, which, in turn, forces hospitals to realize investments only by alienated treatment proceeds. As a result, hospitals try to make profits by increasing their quantity of treatments, pushing staff members more often to feel like assembly line workers. With this, daily clinical life changes and economic goals might become priority over medical principles. In the end, the marketization of medicine results in assigning monetary value to people [1]. Meanwhile, the upcoming commercialisation challenges the doctor’s self-understanding, their trusting relationship with patients, and vice versa. Medical professionals seemed to be reshaped as the essential agents of a new medical economy. This aspect covers a topic of awareness of the political, cultural, and ethical determinants of health care providers in a changing health care industry. As a result, a profound dissatisfaction of different parties let the German Medical Association and the German Hospital Federation together define a new focus on quality of results [2].
About six decades ago, Peter Drucker invented an industrial management technique, called Management by Objectives (MbO). MbO is characterized by the use of target agreements, synonymous with agreements on objectives, which serve as an employee’s consent concerning his or her goals to be achieved. It is a motivational technique that can be used in project work as well as in other areas. MbO has been shown to facilitate teamwork by harmonizing the goals of an individual with a common will [3, 4]. Until now, the individual strength and responsibility of staff members have been prosperously coordinated with the common direction of visions and efforts given by the executive boards. MbO is used widely in industry and has long become a frequently used management technology for medical services as well [4, 5]. Its most important prerequisite for success is target agreements between managerial staff and medical professionals on an equal footing. This raises the question as to how well MbO could still be practiced in the G-DRG-system with lumped treatment prices. This may be an important aspect since health care systems without a funding system based on explicit cost-effectiveness calculations (i.g. National Institute for Health and Care Excellence) will create an increasing pressure on physicians for implicit rationing decisions on micro-level [6–8].
Due to the lack of data on this topic, the author’s anonymously surveyed former physician executives for various types of “target agreements” that hospital managers have used in between the years 2010 and 2015, when the G-DRG-system had already been established [9–12]. The aim of the study was to describe the extent target decisions were based on equality between medical executives and business administrators.
Methods
Questionnaire
The study was approved by the local ethics committee (Ethical Committee, University Hospital Leipzig, 404-15-16112015). A self-made and anonymized questionnaire was used with already retired physicians who had completed their active medical leadership positions in Saxony hospitals (Germany) between 2010 and 2015.
The questionnaire was designed on the subject of the effects of rationalisation, prioritisation, and rationing due to the G-DRG system for a previous study [13]. The aim of this former study was to explore whether a lack of mutual demarcation of these terms could lead to an unnoticed introduction of ethically questionable measures in medicine [14, 15]. In this context, rationalization referred to increasing the efficiency of medical measures. In consequence, useful or necessary measures are not withheld from patients. Prioritization is the explicit statement of priority actions or patient groups before others. These rankings reflect performance, objectives or evaluation criteria in the relation to the provision of medical services. In contrast, rationing is a systematic withholding of useful or necessary medical services out of scarcity reasons [13].
The present mailed out survey focused, among others, on questions about target agreements in hospitals (Table 1). Former executives (executives who had been active between 2010 and 2015) from the disciplines of internal medicine, gynaecology, surgery, and anaesthesiology were surveyed. They were asked whether and to what extent target agreements had been used. Possible answers consisted of “yes” or “no”. One particular “yes” response was followed by a further detailed question with answers according to a three-to-five-point Likert scale. The postal delivery to their home addresses was performed by the Saxon State Medical Association (SSMA). Before data collection had ended, a reminder was provided with a request to participate. The return of the questionnaires was facilitated by inserting a prefabricated and stamped envelope directly addressed to the examiner. Thus, the anonymity of the participants was ensured.
Questionnaire
Questionnaire
Departments with total number of respondents (n = 25), those who experienced target agreements (n = 8) and received financial incentives (n = 4)
*One respondent did not answer the question on the term of targets and incentives.
The evaluated data set includes the following elements: rate of return characteristics of former executives and medical disciplines experiences with both target agreements and incentives
Results
In this survey, the SSMA determined and contacted 111 former executives. Twenty-seven questionnaires were returned, resulting in a response rate of 24%. We excluded two questionnaires because the executives did not meet the criteria of the announced discipline or the time allotted. Thus, twenty-five questionnaires could be analysed. The group of former executives was composed of fourteen heads of department and eleven senior consultants. Twenty-three executives (92%) had fulfilled their management function for at least ten years. Two others had exercised their leading position for between six and ten years. The physician executives belonged to the chosen disciplines of internal medicine, surgery, gynaecology, and anaesthesiology (Table 2).
Out of twenty-five respondents, eight executives confirmed that they had worked with target agreements (Table 1). In the course of this, most managing directors (n = 7) set the objectives. Often targets had not been adapted to the infrastructure (n = 4) or personnel strength (n = 4). Even more rarely were the objectives coordinated with neighbouring departments (n = 6). As a result, the goals were often achieved through overtime work of the workforce (n = 5), and operational activities had to be shifted to the standby service and on-call time (n = 5). Most of the interviewees were dissatisfied with the target agreements (n = 4), and if they had the choice, did not want to use them any further (n = 5).
Out of the eight executives who had worked with target agreements, four respondents confirmed that they received financial incentives. In addition to financial allocations, one respondent confirmed an exemption from clinical work and a boost in personal reputation. The measures of incentives started between 2006 and 2008, with a second wave in 2012.
Discussion
Saxony is one of sixteen federal states in Germany with more than four million inhabitants, seventy-eight hospitals, and 8,900 employed doctors [16, 17]. Our survey demonstrates that about one third of the respondents had worked with target agreements during the period under study. For the most part, top-down targeting was used in a way that predetermined results had to be reached. Here, the given targets were not always coordinated within the inner clinic groups involved. Moreover, set targets often required overtime work. As a result, most medical executives were unsatisfied and preferred to abandon further goal-setting.
Top-down targeting
A goal is a general statement about what you want to achieve; for example, the top goal in the industry is profit maximisation. Targets, however, are more specific and describe how to measure a goal achievement. Top-down targeting emphasises safeguarding of the given target and is considered a relatively authoritarian leadership concept in which the employees have only limited co-determination possibilities. Such top-down targeting could also be described by the term “Management by Results”. Although the reasons for the preference of top-down targeting in our topic seem to be obvious, one can only speculate. In a flat-rate remuneration system with already lifted rationalisation reserves, there seems to be little scope for equal rights between managers and doctors. Particularly with measures that still require investments in personnel or equipment that do not directly pay off, such as investments in patient safety or quality of results, hospital managers might avoid creative leadership techniques with more equal rights for stakeholders, such as MbO, and change their practice to top-down targeting that seems to promise short-term profits.
Medical ethics
Although effective governance mechanisms have been seen as crucial for performance improvements in modern hospitals [18], the popularity of top-down targeting in our study is somewhat surprising, because this measure contains some specific burdens. Here, doctors are committed to both the Hippocratic Oath and the Declaration of Geneva, with decisions primarily based not only on the pursuit of the patient‘s well-being but also on their original charitable motives [19]. As described in Self-Determination Theory by Ryan and Deci, there is a strong and increasing urge for modern managing tools to offer professionals autonomy in order to facilitate competence and relatedness [20]. In particular, the concept of self-determination appears to be an essential foundation, particularly in medicine, where interdisciplinary dialogue and appraisal of neighbouring disciplines characterise historical teamwork, the common goal of which is a patient-oriented health care service. In this regard, management that focuses on old-fashioned, top-down targeting appears less helpful. Conversely, it might promote both structural incapacitation and alienation of the medical profession.
Management by Objectives
MbO focuses on targets that should be SMART (specific, measurable, attainable, realistic, and time-bound). Therefore, SMART targets are conceptualised with equal rights between managers and doctors. In contrast, top-down targeting primarily focuses on given results that unfortunately might be independent of a realistic scene. As our results suggest, at least a large part of set targets could only be achieved through commitments during the leisure time of the employees. This is why top-down targeting often works at the expense of the employees. Moreover, a top-down delegation of the goal achievement might have become an integral and well-calculated component in “hospital success.” Here, the question remains unanswered as to how far medical professionals carry on in such a system in the future if their original motives will be further ignored.
Financial incentives
To overcome these obstacles, three main subliminal strategies could be identified in the past. On one hand, patients were renamed customers and clients in order to provide a further distance from the suffering patient. On another, politicians, health insurance funds and some professional associations of doctors defined a “good” doctor as one, who is also economically orientated. The third and main process reshaping medical professionals as the essential agents of a new medical economy was to financially incentivise them. As a result, a profound dissatisfaction of different parties let the German Medical Association and the German Hospital Federation together define a new focus on quality of results [2].
Our survey shows that already a sixth of the respondents confirmed being financially incentivised. This rate could be much higher today. In the future, it will be logical for financial incentives to be used more often and with a higher grade of penetration. Although financial incentives have been shown to increase productivity in medicine, there is a lack of evidence as to whether incentives will help achieve specific quality improvement targets [21]. Conversely, incentives can hinder autonomy in decision-making and medical competence. Incentives promote competition within the collegiate body to the extent of cost-externalisation between inner hospital departments. Unfortunately, competition in medicine could initiate doubt, mistrust, interface problems, and inefficiency [22]. Nonetheless, in order to engage top-down targeting as routine, hospital managers will have to spread the incentives on a broader scale. It remains to be seen whether such a system will be economically worthwhile in the long-term. The patient‘s need would only be partially taken into account, if at all. Instead, an authoritarian leadership concept makes the market decide how medicine should operate and which ethics doctors are to manage. In the future, financial incentives, if used, should be closely aligned with professional values and coordinated with the main disciplines involved [22]. Similar to the controversy about the financial incentives used by the industry, there is a strong need for clarity about operating economic standards in hospitals [23–28].
Solutions
Conclusively, the G-DRG system, as practiced today, appears to generate a strong rationale for top-down targeting with the primary aim of maximising revenues. The resulting commercialisation has already been criticised, and most stakeholders have found various reasons to feel dissatisfied [11]. Thus, modern clinical life needs to find a holistic solution that integrates the main players. It seems to be crucial for some players to take their responsibilities more seriously in the future. In short, and notwithstanding that the following comments should be treated with due caution given the low response rate to the study: Medical schools should provide an important site for resisting economic shifts by training students to discern and understand the multiple factors involved in sound clinical decision-making [1]. Doctors should clearly position themselves in the case of demands for increased case numbers. A treatment solely based on technical services ignores a patient as a human being. The quality of results and the good of the patient should still be at the center of medical treatment. Cooperative teamwork without allocating financial losses to others should be secured in principle. If financial incentives are used, their implementation should include a critical assessment beforehand, for example, by using a checklist [29]. Hospital managers should be placed at the service of the primary mission of hospitals, namely, the quality of results. A Management by Sustainability (MbS, new term by the authors) should be initiated and secured, in which sustainability in financial and personnel planning are the main targets. Both its implementation and maintenance should be controlled by health insurance funds according to fixed criteria. Professional associations of doctors should position themselves across sectorial limits. They should actively support their members in the daily struggle. Together with health insurance funds, they should manage patients‘ health care more actively with a control of quality of results. Professional associations of hospitals should take responsibility for any commercialisation tendencies. This should be discussed transparently in order to find a method of limitation. The already initiated replacement of financial incentives with quality features should be presented more rapidly and transparently. These measures should be monitored by health insurance funds in order to the get best medical practice for the contributions of their patients. Politicians should bear responsibility in order to clearly communicate that in times of scarce resources, all the health care services cannot be offered around the clock for everyone. Planned investments of approved hospitals should be realised immediately, according to the hospital financing laws.
Limitations of the study
The selected specialties refer to clinics of basic and standard care, which are concerned with the management of a large number of patients in Germany. Due to our focus on a single state (Saxony), the resulting main limitation of this study is the low case number. This appears to be due to the small number of retired colleagues investigated within the period between 2010 and 2015. This is further compounded by the limited response rate of the already retired physician executives to this non-incentivised questionnaire.
The German Medical Association and the German Hospital Federation both recently responded to this topic and agreed on limits for economically motivated target agreements. In the future, more quality-orientated targets should be the focus. The success of an enhanced quality orientation remains to be seen and might be analysed by a nationwide survey that promises results that are more valid. The basic issue, however, remains unsettled.
Conflict of interest
All authors declare that they have no competing interests.
Funding
This study was not funded.
Footnotes
Acknowledgments
The authors thank all participants for their time and assistance. We also thank the Medical Syndicate of Saxony for supporting this study.