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SECOND
FUNDAMENTALS OF EDITION
MEDICAL PRACTICE
MANAGEMENT
STEPHEN L. WAGNER
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This book is dedicated to my wife Cindy and to my children Elizabeth, Charlie, and my late
son Matthew, who passed away since the first edition was published. His health struggles over
many years have always inspired me to help create a better healthcare system.



BRIEF CONTENTS
Preface ......................................................................................................................xv
Acknowledgments ................................................................................................xix
Chapter 1 The Origins and History of Medicine and Medical Practice..................... 1
Chapter 2 Practice Models and Legal Organization ............................................... 39
Chapter 3 Information Technology and Management ........................................... 75
Chapter 4 Regulatory Issues, the Law, and Practice Management ........................ 107
Chapter 5 Strategic Planning, Project Management, and Marketing in Practice

Management ...................................................................................... 133
Chapter 6 Third-Party Payers, the Revenue Cycle, and the Medical Practice ....... 165
Chapter 7 Financial Management and Managerial Accounting in the Physician

Practice ............................................................................................... 205
Chapter 8 Human Resources Management ......................................................... 233
Chapter 9 Leading, Managing, and Governing Within Organizational

Dynamics ........................................................................................... 279
vii


viii Brief Contents
Chapter 10 Quality Management in the Physician Practice ................................... 315
Chapter 11 Emergency Management and the Medical Practice ............................. 345
Chapter 12 The Future and Medical Practice Innovation ...................................... 375
Appendix ............................................................................................................... 429

Glossary ................................................................................................................. 433
Index ....................................................................................................................... 437
About the Author ................................................................................................ 471


DETAILED CONTENTS
Preface.......................................................................................................................xv
Acknowledgments.................................................................................................xix
Chapter 1 The Origins and History of Medicine and Medical Practice..................... 1

Learning Objectives................................................................................. 1
Introduction............................................................................................ 1
Lifelong Learning.................................................................................... 3
The American Healthcare System............................................................ 4
Practice Management Resources.............................................................. 7
The Dimensions of Medical Practice........................................................ 8
Types of Practitioners.............................................................................. 9
Practice Ownership............................................................................... 12
Licensing Physicians.............................................................................. 13
Medical Training................................................................................... 14
What Is Changing?................................................................................ 14
What Are Some of Today’s Challenges?.................................................. 16
Leadership Challenges........................................................................... 26
The Cloud of Anxiety............................................................................ 30
Discussion Questions............................................................................ 31
References............................................................................................. 31
ix


x Detailed Contents
Chapter 2 Practice Models and Legal Organization................................................ 39

Learning Objectives............................................................................... 39
Structures and Organization.................................................................. 39
Affiliation Versus Employment Models and the Corporate
Practice of Medicine...................................................................... 46
Culture and Organization...................................................................... 50
Academic Medical Centers and Physician Practice Management........... 51
Accountable Care Organizations........................................................... 52
Clinical Integration............................................................................... 53
Patient-Centered Medical Homes.......................................................... 55
Integrated Delivery Systems.................................................................. 58
Mergers and Acquisitions...................................................................... 60
The “Great Double Cross”..................................................................... 66
The Changing Landscape of Physician Practice in the
COVID-19 ERA........................................................................... 67
Discussion Questions............................................................................ 70
References............................................................................................. 70
Chapter 3 Information Technology and Management............................................ 75

Learning Objectives............................................................................... 75
Introduction.......................................................................................... 75
Performance.......................................................................................... 76
Interface................................................................................................ 77
Education and Training......................................................................... 77
Meaningful Use..................................................................................... 78
Practice Management Systems............................................................... 81
Other Important Systems in the Medical Practice.................................. 83
The Patient Flow Process and IT’s Role................................................. 86
Interoperability...................................................................................... 87
Value-Based Care and IT....................................................................... 89
Practical Aspects of Medical Practice Information Systems.................... 90
Discussion Questions.......................................................................... 102
References........................................................................................... 102
Chapter 4 Regulatory Issues, the Law, and Practice Management......................... 107

Learning Objectives............................................................................. 107
Introduction........................................................................................ 107
Jurisdiction.......................................................................................... 109
Laws Regulating the Organization and Governance of Corporations... 109
Corporate Organizational Documents................................................. 110
Contract Law...................................................................................... 113
Federal and State Taxation................................................................... 114

Detailed Contents xi
Antitrust Laws..................................................................................... 114

Labor Laws.......................................................................................... 115
Federal Laws Governing Medicare Fraud and Abuse............................ 116
Medical Records Regulations............................................................... 121
Malpractice......................................................................................... 123
The Medical Practices Act.................................................................... 123
Certificate-of-Need Laws..................................................................... 124
Risk Assessment.................................................................................. 125
References........................................................................................... 128
Chapter 5 Strategic Planning, Project Management, and Marketing in Practice

Management....................................................................................... 133
Introduction........................................................................................ 133
Strategic Planning............................................................................... 134
Choosing a Strategic Alternative.......................................................... 136
Developing a Communication Plan..................................................... 136
Strengths, Weaknesses, Opportunities, and Threats Analysis................ 138
Force Field Analysis............................................................................. 141
Economic Analysis of a New or Improved Service............................... 142
Analysis of a Capital Investment.......................................................... 143
Project Management........................................................................... 151
What Is Marketing?............................................................................. 154
References........................................................................................... 161
Chapter 6 Third-Party Payers, the Revenue Cycle, and the Medical Practice........ 165
Introduction........................................................................................ 165
Role and Scope of Financing Healthcare............................................. 166
Management Decisions....................................................................... 167
Insurance Concepts............................................................................. 168
Types of Health Coverage.................................................................... 170
An Illness System, Not a Health System.............................................. 175
Managed Care..................................................................................... 176
Government Health Insurance Programs............................................. 183
The Revenue Cycle.............................................................................. 186
The Reimbursement System for Physicians Is Continuing
to Undergo Significant Changes.................................................. 192
Medicare Physician Fee Schedule ........................................................ 192
Resource-Based Relative Value Scale.................................................... 193


xii Detailed Contents
Medicare Access and CHIP Reauthorization Act................................. 194

References........................................................................................... 199
Chapter 7 Financial Management and Managerial Accounting in the

Physician Practice................................................................................ 205
Introduction........................................................................................ 205
Cost Behavior...................................................................................... 206
Accounting Methods........................................................................... 208
Budgeting............................................................................................ 209
Financial Statements............................................................................ 214
Monitoring Financial Performance...................................................... 217
Physician and Other Provider Compensation...................................... 223
Administering Value-Based Contracts.................................................. 230
The Future of Practice Financial Management..................................... 231
References........................................................................................... 231
Chapter 8 Human Resources Management.......................................................... 233

Introduction........................................................................................ 234
The People in the Practice.................................................................... 234
The Employment, Recruiting, and Hiring Process............................... 236
Talent Management............................................................................. 243
Employment Policies and Procedures.................................................. 247
Organization Development................................................................. 249
Employee Development...................................................................... 249
Change Management.......................................................................... 250
Conflict Management......................................................................... 258
Diversity and Inclusion....................................................................... 260
Reward and Recognition..................................................................... 265
Workforce Shortages............................................................................ 265
Burnout............................................................................................... 267
The Future Workforce......................................................................... 271
References........................................................................................... 272
Chapter 9 Leading, Managing, and Governing Within Organizational

Dynamics............................................................................................ 279
Introduction........................................................................................ 279


Detailed Contents xiii
The Basics and Theories of Leadership................................................. 280

Leadership Versus Management........................................................... 283
The Dyad Leadership Model in Practice Management......................... 284
Leadership: Mission, Vision, and Values.............................................. 288
Professionalism.................................................................................... 290
Leadership Styles................................................................................. 292
Organizational Conscientiousness....................................................... 294
Emotional Intelligence........................................................................ 294
Generational Issues in the Medical Practice......................................... 295
Diversity and Inclusion Issues for Leadership...................................... 297
Giving and Receiving Feedback........................................................... 299
Governance and Organizational Dynamics.......................................... 302
Conducting Meetings.......................................................................... 305
Assessing Leadership Success............................................................... 307
Managing and Leading in an Increasingly Complex Internal
and External Environment.......................................................... 307
References........................................................................................... 309
Additional Reading............................................................................. 313
Chapter 10 Quality Management in the Physician Practice.................................... 315

Introduction........................................................................................ 315
Safety Is Improving............................................................................. 316
Quality and Safety Improvement......................................................... 317
The Triple Aim.................................................................................... 319
The Quadruple Aim............................................................................ 321
Quality Improvement Processes........................................................... 321
Quality Improvement Tools................................................................. 333
Data Analytics..................................................................................... 338
References........................................................................................... 339
Chapter 11 Emergency Management and the Medical Practice.............................. 345

Introduction........................................................................................ 345
The New Nature of Emergencies......................................................... 346
The Key Dilemma............................................................................... 349
Emergency Management..................................................................... 349
Developing an Emergency Preparedness Plan for the Practice.............. 351
Who Is an Emergency Manager?......................................................... 355
Community Emergency Response Teams............................................ 358


xiv Detailed Contents
Special Situations................................................................................ 358

Collaborative Emergency Management............................................... 368
References........................................................................................... 369
Chapter 12 The Future and Medical Practice Innovation....................................... 375

Introduction........................................................................................ 375
Forces of Change................................................................................. 379
The Lesson of the Affordable Care Act................................................. 383
The Promise of Community-Based Primary Care................................ 383
The “New Era” in Medical Education ................................................. 384
Future Workforce Challenges.............................................................. 384
Global Threats and International Cooperation.................................... 386
Advances in Imaging and Laboratory Testing....................................... 387
Evidence-Based Healthcare.................................................................. 387
Data Analytics and Artificial Intelligence............................................. 388
Population Health............................................................................... 391
Chronic Disease.................................................................................. 394
Underserved Areas and Community Health Centers........................... 398
Genomics and Precision Medicine....................................................... 400
The Internet and Self-Efficacy.............................................................. 401
Nontraditional Providers..................................................................... 405
Site-Based Corporate Medical Services................................................ 406
Concierge Practices.............................................................................. 407
Wearables and Internet-Based Medical Services................................... 407
Social Media........................................................................................ 409
Alternative and Complementary Medicine.......................................... 411
Behavioral Economics and Changing Patient Behavior........................ 413
References........................................................................................... 416
Appendix ............................................................................................................... 429

Glossary ................................................................................................................. 433
Index ....................................................................................................................... 437
About the Author ................................................................................................ 471


PREFACE
We are here to make another world.
—W. Edwards Deming
T
he practice of medicine is one of the oldest and most honorable of professions,
but it is facing a revolution that is unprecedented. Navigating this revolution will
require skilled and well-prepared practice managers and leaders.
The world is much different than it was when the first edition of Fundamentals of
Medical Practice Management was published in 2018. The COVID-19 pandemic and climate
change are two of the most notable forces that have had a significant and direct bearing
on the medical practice during this time. Both the pandemic and climate change have
accelerated the pace of the revolution in healthcare, presenting extraordinary challenges to
healthcare organizations and practice leaders. As Charles Darwin said, “It is not the stron-
gest of the species that survives, nor the most intelligent, but the one most responsive to
change” (Kim et al. 2020; Stephenson 2022). Some organizations are surviving and even
thriving as the pandemic abates, but others are faced with the urgent need to make major
changes and lay off employees to stabilize their finances (Faulx 2023; Gamble 2023). We
should hope that the trials of the last several years will make us more aware of and prepared
for the next inevitable crisis (Cutler 2021).
In many ways, the quote that opens this section of the book exemplifies the inten-
tion of this text and the current state of medical practice management as a field. Deming,
widely considered the father of the quality revolution, often said that understanding the
xv


xvi Preface
“why,” not simply the “what,” of our work is essential to provide superior services and
performance. I had the good fortune to learn from Deming and experience firsthand the
foundations of quality management. Through this experience, I gleaned many important
insights about the operation of successful practices. Many years have passed since I realized
the profound impact of this experience, but Deming’s teachings are more relevant today
than ever before. Much of his approach has been repackaged for today’s industries, but the
basis of its truths lies in the tenets Deming demonstrated decades ago.
The true meaning and philosophy of quality and performance excellence get
lost in the details of targets, processes, and tools. The details do not replace wisdom or
developing an appreciation for what it means to demonstrate excellence and be guided
by quality principles. Simply documenting the “right” targets and adopting the right
tools is not enough to succeed; process without purpose is pointless. We need to focus
less on the completion of discrete functions and more on understanding that function’s
purpose so that we can know how to improve it. To that end, education for practice
managers must incorporate development of deep knowledge of healthcare delivery by
the medical practice and its processes. Additionally, today’s practice manager must rec-
ognize and embrace the need for change in the healthcare industry to provide the care
patients need and deserve.
Practice management encompasses a broad range of activities. In large practice orga-
nizations, the manager may have responsibility for a narrow range of functions, but many
practices are small organizations, in which the management must assume multiple roles.
These may include all aspects of operating the enterprise, much like the responsibilities of a
small-business owner. So, although practice managers indeed have a lot of “how-to” to learn,
this book is more than a how-to text; it is intended to encourage the reader to think about
why medical practice managers do what they do and how the roles of other stakeholders
interplay with the manager’s. How-to textbooks in healthcare become obsolete almost before
they are published because the facts are constantly changing. To maintain their relevance,
healthcare management texts must also teach when to carry out the tasks and process and
why they should be done. Above all else, healthcare education books should emphasize,
“First, do the right thing, and then, do it correctly,” not unlike the often-repeated words
of the Hippocratic Oath, “First, do no harm.”
This text focuses on fundamental concepts and knowledge essential to manage,
lead, and develop the wisdom to make the changes needed in medical practices to ensure
a prosperous and sustainable future. Using strategies that are good for all stakeholders is
necessary because healthcare must pose a value proposition for patients and society. This
book is ambitious in its coverage of the field and does not assume the reader has prior
knowledge of practice management; however, it may not cover particular topics to the depth
that some may wish. A book covering every topic applicable to the healthcare administrator
would span many volumes.


8 Fundamentals of Medical Practice Management
of healthcare and practice management are encouraged to develop lifelong learning skills.
The field is changing so rapidly that the need for continuous updating of knowledge and
skills is essential.
For example, practice managers need to build a virtual library of accurate and reli-
able sources. The following list comprises the foundation of that library, which should be
referred to frequently (see the appendix to this text for each resource’s website):
◆◆ Centers for Medicare & Medicaid Services (CMS)

◆◆ Advisory Board
◆◆ Dartmouth Atlas
◆◆ National Committee for Quality Assurance
◆◆ Institute for Healthcare Improvement
◆◆ Institute of Medicine
◆◆ Institute for Health Policy and Innovation
◆◆ Kaiser Family Foundation
◆◆ Robert Wood Johnson Foundation
◆◆ Annenberg Foundation
◆◆ Commonwealth Fund
◆◆ Centers for Disease Control and Prevention
◆◆ Agency for Healthcare Research and Quality
T h e D i m e n s io n s of M edica l P ractice
Governance Medical practices can take many forms, ranging from small sole proprietorships to large
A system of policies multispecialty medical practices. Recent years have seen more medical practices embedded
and procedures that is in large healthcare organizations, which also may be solo practices or large multispecialty
designed to facilitate
entities (see exhibit 1.3).
oversight of the man-
agement of the enter-
A group practice is defined as a medical practice consisting of two or more practi-
prise and serves as the tioners working in a common management and administrative structure. Single-specialty
foundation of how the groups are those that focus on one aspect of medicine, such as general surgery, family prac-
practice will behave, tice, orthopedics, cardiology, or internal medicine. Multispecialty medical groups contain
compete, and docu- more than one medical specialty in the organization. Multispecialty practices are highly
ment its actions. integrated, with a common governance leadership and common management structure,

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(Download PDF) Fundamentals of Medical Practice Management Second Edition Wagner Online Ebook All Chapter PDF

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Fundamentals of Medical Practice

Management, Second Edition Wagner

Fundamentals of Medical Practice Management 2nd Edition

Biota Grow 2C gather 2C cook Loucas

Multilayer Flexible Packaging, Second Edition John R.

Portfolio management theory and practice Second

Prognostics and health management of electronics:

Medical Management of Vulnerable and Underserved

Practice Standard for Project Estimating Second Edition

Fundamentals of psychrometrics Second Edition. Edition

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 1 25/10/23 12:32 PM

Jennifer Bushelle-Edghill, PhD, Chair

Bryan K. Breland, DrPH, JD

Lori Peterson, PhD

Kolby Taylor Redd, PhD, FACHE

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 2 25/10/23 12:32 PM

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 3 25/10/23 12:32 PM

28 27 26 25 24 5 4 3 2 1

Library of Congress Cataloging-in-Publication Data

Health Administration Press Association of University Programs

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 4 09/09/23 10:51 AM

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 5 09/09/23 10:51 AM

HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 6 09/09/23 10:51 AM

Chapter 1 The Origins and History of Medicine and Medical Practice..................... 1

Chapter 2 Practice Models and Legal Organization ............................................... 39

Chapter 3 Information Technology and Management ........................................... 75

Chapter 5 Strategic Planning, Project Management, and Marketing in Practice

Chapter 7 Financial Management and Managerial Accounting in the Physician

Chapter 8 Human Resources Management ......................................................... 233

Chapter 9 Leading, Managing, and Governing Within Organizational

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 7 09/09/23 10:51 AM

Chapter 10 Quality Management in the Physician Practice ................................... 315

Chapter 11 Emergency Management and the Medical Practice ............................. 345

Chapter 12 The Future and Medical Practice Innovation ...................................... 375

Appendix ............................................................................................................... 429

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 8 25/10/23 11:32 AM

Chapter 1 The Origins and History of Medicine and Medical Practice..................... 1

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 9 12/09/23 2:23 PM

Chapter 2 Practice Models and Legal Organization................................................ 39

Chapter 3 Information Technology and Management............................................ 75

Chapter 4 Regulatory Issues, the Law, and Practice Management......................... 107

HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 10 09/09/23 10:51 AM

Antitrust Laws..................................................................................... 114

Chapter 5 Strategic Planning, Project Management, and Marketing in Practice

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HAP_95_Fundamentals_of_Medical_Practice_Management_FM.indd 11 09/09/23 10:51 AM

Medicare Access and CHIP Reauthorization Act................................. 194

Chapter 7 Financial Management and Managerial Accounting in the

Chapter 8 Human Resources Management.......................................................... 233

Chapter 9 Leading, Managing, and Governing Within Organizational