Monday, July 14, 2003

A Deadly Disease: Management on Numbers Alone.

How shall we pay emergency physicians? The question increasingly resonates through our professional organizations and publications, our gatherings both animate and virtual. Hourly rates, clinical productivity and customer satisfaction as measured by survey are often mentioned and a plethora of other measurable factors also described. Little questioned or discussed is the implicit principle that compensation shall be directly tied to measured clinical productivity. Ron Hellstern on emed-l recently opined:

“The chief value of RVU-measured productivity-based compensation is to better align the physician's compensation with how the group gets paid. From a practice revenue standpoint, the only meaningful unit of productivity is a billable (meaning appropriately documented in the judgment of a certified coder) RVU of service.[1] The further the physician's payment methodology from this reimbursement reality (such as paying by the hour, by the patient, by the charges, and etc.) the greater the likelihood of a distortion of the relationship between revenue producer and revenue benefactor.”[2]

Our compensation is important. Just as with our hospitals where, “No margin, no mission” has become an explicit reality; so too for us and our colleagues with our mortgages, student loans, tuitions and routine costs of living; earning our livelihood is no longer an easy assumption. Yet for some emergency physicians, compensation is not the sole basis of their satisfaction with their present professional circumstances. Other factors matter, both pragmatic—their schedules and idealistic—a sense of accomplishment or a desire for improving their practice and hospital.

W. Edwards Deming taught his “System of Profound Knowledge” as a management method inclusive of measurement and knowledge about variation that he insisted must be combined with an appreciation for a system, the understanding of people and their psychology, and a theory of knowledge. Out of his system he called for a transformation in American business and cited “14 points, seven deadly diseases and some obstacles” of management. I have found and continue to find these general principles valuable in my life as a physician-leader and I commend them to you through the sources I’ve listed at the end of this month’s column. Though the current rubric for improvement is proclaimed through Six Sigma®, a term owned by Motorola, much of the tools and the principles of the Six Sigma® approach are contained within the work of Deming, Joseph Juran and other quality leaders, absent the Six Sigma® branding and “board appeal.”

As pressures on our clinical practice environment mount, not the least of these are the pressure we all feel from an emphasis on measurement. I hope I’ve contributed to your efforts at measurement beginning with my first column of April 2000 in EMN proclaiming the importance of measurement, “Without measurement, how will we know that a change is an improvement?” Thus some of you might exclaim, “He’s a proponent of measurement. He’s contributed to the pickle we’re in today. Now he’s recanting—backpedaling; how hypocritical.”

Well, no, I’m not.

One of Deming’s “seven deadly diseases” is commonly stated as in this column’s title: “Management on numbers alone. There are measures of quality that are unknown and unknowable.”

Doctor Hellstern is quite correct regarding the value of RVU based measurement; however, measurement of RVUs alone is insufficient. I believe that Deming, a Ph.D. physicist and practicing statistician, would have insisted that measurement of RVUs was not the problem, rather the reliance on the measurement alone, outside of his system of profound knowledge that’s the problem. My frustration and occasional impassioned rejoinders to colleagues derives from my perceived oversight of the inter-relatedness of the components of profound knowledge and their integration by the practice—a leadership responsibility. The absence of consideration of the “big picture” within which emergency physicians earn their livelihood seems lacking in the mostly oversimplified discussions of emergency physician compensation I referred to at the top of this column. Measurement is not the culprit; rather it is the reliance on measurement alone that infects us with this “deadly disease” of management.

I suggest that you could provoke quite a discussion among colleagues if you asked, “What single vital sign was the most reliable predictor of the need for admission?” Most of my colleagues would think me foolish for asking such a question. So too is it foolish to insist that only RVUs or any other single or simple combination of measurements alone should serve as the basis for an emergency physician’s earnings.

We live in a competitive and capitalist country and I’m glad I do; but we also live with rules that guide us and set limits on competition and regulations that constrain laissez-faire capitalism. As physicians we put our patients first, maintain a special body of knowledge and reserve to ourselves the right to evaluate our own quality.[3] Compensation plans simply can’t be limited to the numbers alone.

I encourage and appreciate the use of measurement in the creation of compensation plans; but a slavish insistence that compensation should be determined solely by formula overlooks the broader principles of what we seek from a “good doctor” and what society seeks from us. Unless within our practices we articulate our mission for the practice and our vision for our practice’s future, we have no basis on which we can develop the “profound knowledge” or guiding principles for our practice—principles that should also derive from our profession and make what we do something more than merely a skilled trade.

Compensating emergency physicians as a formulaic exercise consigns us to suffering Dr. Deming’s “deadly disease” and overlooks our profession’s values and our heritage derived thereby. Perhaps idealistically I believe that physician earnings must include factors beyond the mere measurable. Otherwise, I’m abrogating my responsibilities as a leader and a professional and unthinkingly acceding to untrammeled capitalism triumphing over common sense—just as other skilled trades people have.

[1]RVU= relative value unit. Derived from the Resource-based relative value scale of determining physician work involved in various aspects of clinical care and procedures.

[2]Quoted with permission from an email message posted on emed-l an Internet mailing list by Ronald A. Hellstern, M.D. Thu May 15 2003 - 07:45:10 PDT. Subscribe using the Emergency Medicine list subscriber.

[3]Brent James, MD, M.Stat.: M4 - Managing Clinical Processes: Tools for Physician Participation and Leadership” Presented at the 14th Annual National Forum on Quality Improvement in Health Care; Walt Disney World Swan & Dolphin Hotels, Orlando, Fl; Monday, 9 December 2002; 8:30a - 4:00p; viewed on May 18, 2003 at

Suggested sources for reading about W. Edwards Deming and his management methods:

Walton, Mary: The Deming Management Method. Perigee, 1988. ISBN: 0399550003

Deming, W. Edwards: The New Economics for Industry, Government, Education - 2nd Edition. MIT Press, 2000. ISBN: 0262541165 (Recommended of all of W.E.D.’s books because it talks the most about services, i.e., government and education.)