Workforce and Organizational Change: Implications for Cost Containment

Abstract

Fundamental changes have occurred in the financing of medical care in the United States during the past decade. Until recently, health care providers increased their income by increasing the services delivered to patients under fee-for-service reimbursement. In the United States, enthusiasm for government organized health care reform gave way to market based reform led by employers and insurers. Although the primary mechanism managed care uses to reduce costs is to control the reimbursement mechanism, medicine has responded to fiscal constraints with changes in the organization and workforce used to deliver medical care. These reforms were not invented by managed care but borrowed from other industries who developed them to meet the financial realities of their own increasingly competitive markets. These reforms include downsizing, team based management, enhanced skilled workers, and outsourcing. Whether these business principles will lead to a more efficient, less expensive, higher quality, and more accountable medicine, or whether they will lead to a top-heavy middle management layer, a bottom line ethic, poor care, and a general loss of distinguished medicine as a caring and compassionate field remains to be seen.

Key Words:

Downsizing - team-based management - enhanced skilled workers - outsourcing.