‘Integrated rates’ huge risk for the manageability of the hospital

The preliminary conclusions of the doctoral research of Ron van der Pennen indicate the risks regarding the manageability of the hospital that stem from the implementation of the policy of ‘integrated rates’. 

The crucial relationship between the Board of Managing Directors and the medical specialists is once again subjected to scrutiny with the intended implementation of ‘integrates rates’ in Dutch hospitals in the year 2015. The intended purpose of the government with this new policy is to align the interests between the Board and the medical staff in accordance with the current coalition agreement. The first results of my doctoral research into decision-making between the Board of Managing Directors and medical specialists seem to indicate that the policy of integrated rates will put the manageability of the hospital at risk.

With my research, I wish to contribute to the governance-debate within Dutch hospitals. The challenges that hospitals are to face in the years to come are major and numerous and this will require decision-making between the Board and the medical staff. Both parties must bear the heavy task of guaranteeing the continuity of the organization in this respect. However, both Board of Managing Directors as well as the medical staff represent an ideal-typical value pattern of their own. In this way, ideal-typical values such as quality of care, accessibility and affordability correspond with the value pattern of the hospital as an organization, whereas professional autonomy, professional ethics, the interest of the patient comes first and an open and testable attitude are ideal-typically characteristic of the professional medical domain. And that is precisely the core of the problematic complexity of hospital governance. Which is why I am studying how the Board of managing Directors and the medical specialists deal with values in the decision-making process.

The preliminary conclusions of my research cast a shadow over the dossier ‘integrated rates’. The parallel between ‘integrated rates’ and two previous initiatives imposes itself in this respect. These concern the experiment with performance-related pay for medical specialists in 2008 and the introduction of the variable fee in 2012. Both show disappointing results. Both of these cases involved considerable demands on the relationship between the Board and the medical staff. And so acquired experience predicts that the implementation of ‘integrated rates’ will also have adverse effects on the manageability of the hospital. We would be wise to take this to heart.

It is furthermore evident that new initiatives and policy intentions are not successful because these are approached in an ‘isolated’ manner. New policy is introduced on the basis of a single value pattern alone. And so it lacks any affiliation with other value patterns. The experiment with the performance-related pay involved the straightforward translation of the values that correspond with the market domain. There was no affiliation with the values of the hospital and the medical staff. The same goes for the policy of ‘integrated rates’. Improving governance between the Board of Managing Directors and the medical specialists along the financial axis (the fee of the medical specialists), does not accommodate the complexity of the hospital and does not link up with the value pattern of either party. It is not inconceivable that it will intensify the differences of opinions between the parties rather than remove these.

It is evident from the cases that I have studied that the focus lies primarily on that which is visibly evident in the behavior of the Boards of managing Directors and the medical specialists. However, a world lies hidden behind this behavior, it turns out, that is not seen and therefore (too) often not taken into consideration. This also strikes the eye when considering the implementation of ‘integrated rates’. Attention is only paid to the visual aspects: the realization of systems and structures, known as ‘the 2015 models’. And so the question is still whether the relationship between the Board and the medical specialists can even be regulated through these formal systems and structures. It is not the formal, but precisely the informal and invisible processes between the Board of Managing Directors and the medical specialists that ensure that both parties work well together and keep the hospital manageable.

The preliminary conclusions of my doctoral research indicate the risks regarding the manageability of the hospital that stem from the implementation of the policy of ‘integrated rates’. The increasing administrative unrest in Dutch hospitals, with all its consequences, is not without reason. Expectations are therefore that the manageability of hospitals will be actively put to the test as of 1 January 2015. In view of the importance of the informal, invisible, multiform and fluid combined action of the Board of Managing Directors and medical specialists for the governance of the hospital, the biggest challenge still lies ahead.