Case in Point: Developing a Unique Healthcare Model

[The following post is re-blogged from SAGE Connection. Click here to view the original article.]

Karen Pellegrin, Director of Continuing Education & Strategic Planning and Founding Director of the Center for Rural Health Science at the University of Hawaii at Hilo, Daniel K. Inouye College of Pharmacy

When the Patient Protection and Affordable Care Act (aka “Obamacare”) went into effect, the healthcare industry experienced the largest expansion of US government involvement since Medicare and Medicaid. This shift in government involvement created a ripe environment for government-subsidized clinics to flourish; but they weren’t the only clinics to do so. Mango Medical, a small business in rural Hawaii that does not rely on government subsidies, experienced enormous success in 2015 due to its unique primary care model that pays doctors for value of service over volume.

Karen Pellegrin & Timothy Duerler wrote a case study for SAGE Business Cases called Mango Medical: Growing a Fresh Healthcare Model. The case follows the creation and success of Mango Medical and allows students to gain a deeper understanding of healthcare trends, markets, systems, and strategies used in the US.

Highlighting the case in this latest installment of our Case In Point series, we caught up with Karen to learn more about the rise of the Mango Medical and the current healthcare environment. Karen provided some helpful insight for any instructor teaching about healthcare in business and management or organizational courses. Read the interview below.

  1. Your case describes the growth of a for-profit healthcare corporation in rural Hawaii, where the market seemed more primed for government-subsidized clinics after the passage of the Affordable Care Act. What would you say are the top three takeaways from this case for those learning about different healthcare models?

 Assumptions about subsidies, both the need and the amount, are typically based on current or traditional models of care; if you don’t question those assumptions, you conclude subsidies are required and easy to quantify.  If you question those assumptions, you might be able to create a more efficient model, as Dr. Duerler has.  There are many inefficiencies in our healthcare system, and we need new models to deliver better, more cost-effective care.

The healthcare industry is highly regulated and complex, which makes it tough to navigate; but where most see obstacles, entrepreneurs find opportunities.

In some ways, you could argue that rural Hawaii is such a unique market that the Mango model wouldn’t succeed in other markets.  I would argue that there is more in the model that translates than not.

  1. After the 2016 election, it seems likely we’ll be seeing some changes in government-subsidized health care. How do you see any potential changes affecting a business like Mango Medical?

 Passing the Affordable Care Act was difficult; changing it is proving to be even more difficult despite the known problems.  In general, the Republicans are focused on eliminating federal mandates that reduce choice and eliminating or changing subsidies.  Assuming fewer people would have health insurance or subsidies to cover the cost of care under a Republican replacement, this could affect Mango’s revenue.  However, because of their operating efficiency, Mango might be an attractive option to those without insurance or with high deductibles who are paying out of pocket.  Businesses focused on value and adaptability, like Mango Medical, will likely maintain a competitive advantage in a dynamic market.

  1. What are some of the marketing challenges faced when a new, growing company like Mango Medical has to adapt to a unique, rural setting?

 Communicating with target audiences is always key.  Our research has found that traditional formal marketing approaches are far less effective (and more expensive) than informal methods in reaching target audiences in rural Hawaii – specifically community members and clinicians.  Getting the message across about a new product or service can be done very efficiently and effectively by understanding the local landscape and leveraging existing communication networks.

Learn more by reading the full case study, Mango Medical: Growing a Fresh Healthcare Model, from SAGE Business Cases, open to the public for a limited time. To learn more about SAGE Business Cases and to find out how to submit a case to the collection, please contact Rachel Taliaferro, Associate Editor: rachel.taliaferro@sagepub.com.

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Call for Papers: Journal of Developing Societies Special Issue

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The Journal of Developing Societies is currently seeking manuscripts for an upcoming special issue on A Comparative Analysis of Health Care in a Globalizing World: Recent Trends in Developing Nations.

Click here to view the full submission guidelines.

Submissions are due by: November 30, 2017

The Journal of Developing Societies is a refereed international journal on development and social change not only in ‘developing’ countries but also the ‘developed’ societies of the world. It provides an interdisciplinary forum for the publication of theoretical perspectives, research findings, case studies, policy analyses and normative critiques on the issues, problems and policies of both mainstream and alternative approaches to development.

On SAGE Insight: The link between superbugs and hospital outsourced cleaners

[The following post is re-blogged from SAGE Insight. Click here to view the original post.]

Article title: Superbugs versus outsourced cleaners: Employment Arrangements and the Spread of Health Care–Associated Infections
From ILR Review

On any given ILR_72ppiRGB_powerpoint.jpgday, one in every 25 patients in U.S. hospitals has a health care–associated or hospital-acquired infection (HAI)—one of a handful of so-called superbugs that contribute to the deaths of 75,000 of these patients. Not surprisingly, health care practitioners and scholars have turned their attention to clinical and delivery-of-care factors that might account for HAIs. This article provides novel, quantitative, empirical evidence linking a specific type of employment arrangement—outsourcing—to patient safety. It shows that in addition to the more widely examined clinical culprits, the HAI challenges plaguing the U.S. health care system are also a function of the strategic employment choices that organizations make in relating to their nonclinical staff. The findings have important implications for health care scholars, practitioners, and policymakers.

 Abstract

On any given day, about one in 25 hospital patients in the United States has a health care–associated infection (HAI) that the patient contracts as a direct result of his or her treatment. Fortunately, the spread of most HAIs can be halted through proper disinfection of surfaces and equipment. Consequently, cleaners—“environmental services” (EVS) in hospital parlance—must take on the important task of defending hospital patients (as well as staff and the broader community) from the spread of HAIs. Despite the importance of this task, hospitals frequently outsource this function, increasing the likelihood that these workers are under-rewarded, undertrained, and detached from the organization and the rest of the care team. As a result, the outsourcing of EVS workers could have the unintended consequence of increasing the incidence of HAIs. The authors demonstrate this relationship empirically, finding support for their theory by using a self-constructed data set that marries infection data to structural, organizational, and workforce features of California’s general acute care hospitals. The study thus advances the literature on nonstandard work arrangements—outsourcing in particular—while sounding a cautionary note to hospital administrators and health care policymakers.

Read this article for free

Article details
Superbugs versus outsourced cleaners: Employment Arrangements and the Spread of Health Care–Associated Infections
Adam Seth Litwin, Ariel c. avgar, and Edmund E. Becker
ILR Review
May 2017
DOI: 10.1177/0019793916654482

For more of the latest research from ILR Review, be sure to visit the Table of Contents for the latest May issue.  Included in the newly released issue are papers that discuss the debate on the effects of minimum wage, recent labor market topics, employment effects of healthcare reform, and how underemployment will continue to affect labor market opportunities.

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From the Ordinary to Corruption in Higher Education

[We’re pleased to welcome author Mildred A. Schwartz of the University of Illinois at Chicago. Schwartz recently published an article in the Journal of Management Inquiry entitled “From the Ordinary to Corruption in Higher Education.” From Schwartz:]

When I moved to New Jersey after many years of teaching in Chicago, my interest as a political and organizational sociologist was piqued by theJMI_72ppiRGB_powerpoint.jpg kind of corruption I learned of.  Not fully satisfied with existing theories and explanations, I began thinking of how to approach corruption as a sociological phenomenon.  Then, when I read local press coverage about misconduct at the University of Medicine and Dentistry of New Jersey (UMDNJ), I felt that I had found the ideal case
for exploring how corruption could arise even within such an unexpected setting–a university dedicated to the health care professions.

Of all the findings that came from my research, at least two were surprising.  One was the prevalence of many of the illegal or unethical behaviors found at UMDNJ in other U.S. universities that had medical schools.  The second was the ability of UMDNJ and other universities, despite misconduct, to still fulfill their duties to train health care professionals, advance scientific research, and treat the sick.

I would like to think that my findings will inspire efforts at controlling organizational corruption, particularly as it is manifested in higher education.  At least three guidelines emerged from the larger research, discussed in my book, Trouble in the University:  How the Education of Health Care Professionals became Corrupted (Brill, 2014).  One is the importance of enough transparency to allow organizational participants to understand how decisions are made.  Second is the need for accepted avenues through which to express complaints without fear of reprisal.   Third, and this is especially relevant to state-supported universities although it is not confined to them, is the need for firm boundaries between politics and education.

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Book Review: Selling Our Souls: The Commodification of Hospital Care in the United States

bookjacketSelling Our Souls: The Commodification of Hospital Care in the United States. By Adam D. Reich Princeton, NJ: Princeton University Press, 2014. 248 pp. ISBN 978-0-6911-60405, $39.50

Nick Krachler recently published a book review in ILR ReviewAn excerpt from the review:

Reich’s main focus is on the institutional legacies that shape how the people working in his cases reconcile the contradictions between their non-economic values and market pressures. The former public hospital’s contradiction is between the scarcity of resources and the practice of providing extensive uncompensated care to underinsured and uninsured patients. The people in this hospital view care as a social right, and Reich interprets their disregard for efficiency and profitability as rebuffing market pressures. In the Catholic hospital, the contradiction is between the values of sacrifice and dignity, with which many in the hospital identify, and management’s Current Issue Covermarketing of these values to attract high-paying patients, the treatment of uninsured patients with little dignity, and the lowest wages for nurses and ancillary workers among the three cases studied. Reich interprets this case as moralizing market pressures. In the integrated health management organization, customized care according to each patient’s special needs contradicts the organization’s prevailing operating principle of standardizing and rationing care by scaling up efficient practices. Reich interprets this case as taming market pressures through the use of bureaucracy and big data. The author lays out these three types of moral–market relationships by examining the conception of care, the structure of physicians’ work, and the power and division of labor between physicians, nurses, and ancillary workers including the role of labor relations in each of the cases. Another interesting argument in the book is that these three different moral–market relationships correspond to three different historical periods. I find Reich’s well-grounded discussion and critique of the three models highly persuasive.

If you’d like to read the full review from ILR Review, you can click here to access the book review for the next two weeks. Interested in staying up to date with all the latest content published by ILR ReviewClick here to sign up for e-alerts!

Overcoming Obstacles to Establish the Largest Voluntary Employees’ Beneficiary Association

16687016354_ca450d18ec_z[We’re pleased to welcome Frank Giancola, HR researcher and retired practitioner for companies like Ford Motor Company, Eastern Michigan University, and the US Air Force. Frank recently published an article in Compensation Benefits Review entitled “The Turbulent History of the Nation’s Largest Voluntary Employees’ Beneficiary Association.”]

I decided to write an article about the U.S. auto workers’ healthcare VEBA for several reasons. First, I thought that the VEBA concept was not well-known in the benefits profession and that additional coverage was warranted. Second, the history of the auto workers’ VEBA tracks the timeline of the recent decline, bankruptcies, and Current Issue Coverrevival of the auto companies, one of the nation’s most important industries that directly and indirectly is responsible for millions of American jobs. Legacy health care costs were an important factor driving the bankruptcies. Third, I had the good fortune to work for one of the involved companies, Ford Motor Company, as a benefits professional, so I had first-hand knowledge of the issues and how the companies work with the hourly employees’ union, the United Auto Workers, to establish innovative employee benefit programs.

The union proposed the VEBA to the companies, as a means to protect the health care benefits of its retired members. Because of its commitment to its members, and the companies’ responsibility to its retirees and need to mitigate huge legacy costs, the parties were able to overcome monumental challenges that threatened the existence of the VEBA. The success of the VEBA demonstrates the ability of the collective bargaining process to deal effectively with a major issue in our country.

I was pleasantly surprised to see that the VEBA was able to provide medical benefits to over 500,000 retirees without encountering significant start-up difficulties, and that supplemental plan funding was obtained from reductions in the pay of active employees.

It is my hope that readers will find this history to be interesting and informative, so that when faced with the rising costs of providing health care benefits to retirees, they will have another option to consider to meet the challenge.

The abstract for the paper:

The Detroit automakers’ Retiree Medical Benefits Trust is the nation’s largest Voluntary Employees’ Beneficiary Association (VEBA). It is an independent trust with assets of $60 billion that is responsible for providing medical, prescription drug, dental and vision benefits to 720,000 hourly retirees, surviving spouses and dependents of General Motors, Ford and Fiat Chrysler. It was established in 2007 through the joint efforts of the Big Three Detroit automakers and the United Automobile Workers Union primarily to protect the health care benefits of hourly retirees and to provide the companies with financial relief from the burdens of legacy costs that eventually contributed to their bankruptcies. Although it is now viewed as a success, there were times in its history when its inception and future were seriously in doubt. A review of its history will inform HR professionals of the problems and solutions they may encounter in establishing a VEBA.

You can read “The Turbulent History of the Nation’s Largest Voluntary Employees’ Beneficiary Association” from Compensation Benefits Review free for the next two weeks by clicking here. Want to stay current on all of the latest research from Compensation Benefits Review? Click here to sign up for e-alerts!

*Image attributed to Pictures of Money (CC)

ILR Review Special Issue: Work and Employment Relations in Health Care

8639003804_2bd2b5f140_zThe August special issue of ILR Review is now available and open to access for the next 30 days! Included in the special issue on Work and Employment Relations in Health Care are papers that discuss the relationship between nurse unions and patient outcomes, the effect of electronic health record adoption on physician productivity, and the impact nurse staffing strategies have on patient satisfaction. In the introductory editorial essay, Ariel C. Avgar, Adrienne E. Eaton, Rebecca Kolins Givan, and Adam Seth Litwin outline the problems inherent in US health care, most notably the fact that despite outspending other countries on health care costs per capita, the US demonstrates above-average rates of medical errors and below-average life expectancies. As the health care system moves toward reform, the authors argue for careful consideration of how workplace dynamics impact the outcomes for everyone involved in health care. The editorial thus highlights the importance of research on work and employment relations in the health care industry:

This special issue of the ILR Review is designed to showcase the central role that work organization and employment relations play in shaping important outcomes such as the quality of care and organizational performance. Each of the articles included in this special issue makes an important contribution to our understanding of the large and rapidly changing health care sector. Specifically, these articles provide novel Current Issue Coverempirical evidence about the relationship between organizations, institutions, and work practices and a wide array of central outcomes across different levels of analysis. This breadth is especially important because the health care literature has largely neglected employment-related factors in explaining organizational and worker outcomes in this industry. Individually, these articles shed new light on the role that health information technologies play in affecting patient care and productivity (see Hitt and Tambe; Meyerhoefer et al.); the relationship between work practices and organizational reliability (Vogus and Iacobucci); staffing practices, processes, and outcomes (Kramer and Son; Hockenberry and Becker; Kossek et al.); health care unions’ effects on the quality of patient care (Arindrajit, Kaplan, and Thompson); and the relationship between the quality of jobs and the quality of care (Burns, Hyde, and Killet). Below, we position the articles in this special issue against the backdrop of the pressures and challenges facing the industry and the organizations operating within it. We highlight the implications that organizational responses to industry pressures have had for organizations, the patients they care for, and the employees who deliver this care.

You can read the special issue of ILR Review free for the next 30 days by clicking here. Want to stay current on all of the latest research published by ILR Review? Click here to sign up for e-alerts!

*Nurse image attributed to COD Newsroom (CC)