The influence of budget-holding on cost containment and work procedures in primary care clinics.

In 1990, Kupat Holim Clalit (KHC), Israel's largest health insurance fund, initiated a demonstration program for transforming primary care clinics in the Negev district of southern Israel into autonomous budget-holding units. Four program components were implemented in nine clinics: allocation of a fixed budget; expansion of day-to-day decision-making authority; establishment of a computerized information system for producing monthly reports on expenditure; and provision of incentives for budgetary responsibility (returning part of a clinic's savings for use at its discretion). The demonstration program had three objectives: budgetary control and cost containment; improvement of services and increased client satisfaction; and improvement in the motivation, initiative, responsibility, and satisfaction of clinic staff. This report presents interim findings from an evaluation study of the budget-holding program conducted in 1991-1992. The report considers three questions: How was the demonstration program implemented? Did work procedures in the clinics change following implementation of the program? How did budget-holding influence levels of expenditure in the clinics? The program components were implemented gradually in the nine clinics during 1991-1992. Not all, however, were fully implemented. The staff survey conducted after implementation of the program identified a number of changes in the work procedures of the clinics: heightened cost consciousness, discussion of the monthly expenditure reports, emphasis on the need to economize, and attempts to economize. Data on expenditure in the budget-holding clinics were analyzed and compared to data on expenditure in primary care clinics in the Negev district as a whole. It was found that while the average quarterly per capita expenses in the district increased in real terms from 1991-1992, expenses in the budget-holding clinics remained stable or, in some cases, actually decreased. While we cannot conclude categorically from the existing data that the budget-holding program is responsible for the unique patterns of expenditure in the nine clinics, we can confidently state that work procedures in the nine clinics changed following implementation of the program and that the clinics achieved cost containment relative to the district as a whole. Findings from the various research tools support one another, and reinforce the conclusion that budget-holding can potentially promote cost containment.

Does budget-holding have a long-term effect on expenditure, staff and patients?

Kupat Holim Clalit (KHC), Israel's largest sick fund, initiated a unique demonstration program to transform primary care clinics into autonomous budget-holding units. The program was accompanied by an evaluation study that examined the influence of the program on clinic staff, level of expenditure, quality of service and patient satisfaction. Few studies have empirically examined the influence of a budget-holding program in relation to such a wide range of expected outcomes. A longitudinal study was conducted from 1991 to 1994 employing two methodologies: (a) a controlled case study of one experimental and one control clinic and (b) monitoring of all nine budget-holding clinics over time, compared to other clinics in the district. Multiple research tools were used: staff surveys, patient surveys, in-depth interviews, and analysis of financial data. The findings indicate that the budget-holding program has the potential to achieve cost containment without injuring staff morale, the service to patients or patient satisfaction. However, the KHC program did not lead to the expected improvement in staff motivation and attitudes, clinic services and clinic responsiveness to patients' needs. Implications for the literature on organization and management and for organizations considering the implementation of budget-holding programs are discussed.

Quality of care and patient satisfaction in budget-holding clinics.

A budget-holding program was implemented in nine primary care clinics in the Negev district of Kupat Holim Clinic, Israel's largest sick fund. This study, carried out from 1991 to 1994, evaluates the impact of this program on patient satisfaction and other selected indicators of quality of care, using a controlled case study methodology. Structured questionnaires were used in face-to-face interviews with a representative stratified sample of 523 patients registered in the clinics. Patient reports were used to measure patient satisfaction, accessibility of services, comprehensiveness of care, responsiveness to patients' needs and performance of preventive medicine activities. Other research tools included staff surveys, in-depth interviews and administrative data on transfer among sick funds. The findings counter fears that budgetary control and cost-containment negatively affect quality of care and patient satisfaction. However, the program did not fulfill expectations regarding improvement in clinic services and patient satisfaction.

[Employment of Russian immigrants in 1998: summary of research and followup findings].

This study examined trends in the employment of immigrant physicians from the former Soviet Union. We studied the changes in the proportion of immigrants employed as physicians between 1994 and 1998, job characteristics, positions, professional status, and improvement in employment characteristics, professional status, and in wages due to increased seniority. The study population consisted of 7,000 physicians who had immigrated to Israel by June 1992 and had applied to the Ministry of Health for medical licensing. Of these, 726 were interviewed in 1994 and in 1998 all 726 were again approached and 84% were interviewed by telephone. Of those interviewed in 1998, 63% were working as physicians, 21% in another occupation, and 16% were not working at all. Of those with medical licenses, 79% were working as physicians. Of those interviewed in 1994, 93% were still employed as physicians in 1998, and 88% of them had been so employed continuously. As of 1998, 85% of those interviewed had 5 or more years seniority as physicians in Israel, and half had been working for more than 5 years at their current place of employment. The best predictor-variable for employment as a physician in 1998 was employment as a physician in 1994. The proportions of those employed by a public employer, of those earning monthly salaries, and of those with a tenured position, were greater in 1998 than in 1994. In 1998, 70% reported being employed in a authorized staff position. Funding for the salaries of 75% of these physicians came from the budget of their place of employment, not from a grant, stipend, or temporary fund for the assistance of immigrants. These proportions increased with seniority. The proportions of specialists (22%) and residents (37%) had increased in 1998 relative to 1994 (when they were 8% and 23% respectively). In addition, since 1994 gross hourly wages had increased with seniority in real terms by more than 100%. These findings are evidence of work stability and improvement in employment conditions of these immigrant physicians. Further, the 1998 follow-up indicated a trend toward becoming "established" and improvement in professional status. However, it also revealed models of temporary employment, not in compliance with physicians' collective work agreements, a situation that warrants examination. It is also important to examine the implications of the absorption of so many physicians for medical manpower in Israel, and for overall expenditure on health.

[Role of the hospital director: an interorganizational comparison].

This study analyzes the role of the medical director of general hospitals in Israel. 26 directors of general hospitals were interviewed, of whom 7 managed independent or nonprofit hospitals, and 19 government or Kupat Holim Clalit hospitals. In Israel, hospital directors deal mainly with issues referred to in the literature as the "production" of hospital outputs and spend less time adapting the hospital to its changing environment. Accordingly, hospital directors spend only one-fifth of their time outside the hospital negotiating with outside agencies, and half of their time in their offices. More than 2/3 of the directors expressed dissatisfaction with the way they allocated their time, and said they would prefer to spend more time on long-term planning, quality control, and professional development, and less on ongoing operation. The management style of directors of independent hospitals was less centralized and they perceived themselves as having more authority than did directors of hospitals which are part of large, public, multihospital organizations. The independence of hospitals and the creation of a more competitive hospital market may make adapting the hospital to its changing environment a central part of the hospital director's agenda. Moreover, as hospitals gain more independence, directors will be granted broader authority and will have to assume more responsibility. These changes will require directors to adopt a different managerial orientation than that indicated by the findings of this study.

[Stages in the licensing process for immigrant physicians in Israel].

The latest wave of immigration, mostly from the former Soviet Union, has brought with it a large number of physicians. They are required to go through various stages of a licensing process in order to practice medicine in Israel. This overview describes the process, from arrival in Israel to the issuing of the license to practice medicine. From September 1989 to December 1991 some 9,800 of arriving immigrants identified themselves as physicians to Ministry of Absorption officials. However, only about 7,000 submitted requests for a medical license to the Ministry of Health. Physicians with at least 20 years of experience need not take an examination, but are required to work under supervision for 6 months in order to receive a license. Of those requesting a license, 1/3 had 20 years or more of professional experience, while the others had to take licensing examinations. By the end of December 1991, some 2,900 physicians had received licenses to practice medicine. This indicates that many immigrant physicians have yet to complete the licensing process.

Challenges in implementing a budget-holding programme for primary care clinics.

In 1990, Kupat Holim Clalit (KHC), Israel's largest sick fund, initiated a demonstration programme for transforming a number of primary care clinics in the Negev district of southern Israel into autonomous budget-holding units. Four programme components were implemented in the nine participating clinics: allocation of a fixed budget; expansion of day-to-day decision-making authority; establishment of a computerized information system to produce monthly reports on expenditure; and provision of incentives for budgetary control. The research findings are based on a four-year evaluation of the programme, which involved a longitudinal case study conducted with multiple research tools: in-depth interviews, a staff survey, and analysis of relevant documents. This article analyzes the challenges involved in implementing the demonstration programme. It examines clinic staff evaluation of the implementation process (e.g. overall staff had a positive attitude toward it); assesses staff satisfaction with clinic participation in the programme (while only 33% were satisfied, only 21% said they would like the clinic to revert to the pre-programme model) and factors influencing this satisfaction (among them intrinsic benefits, perception of the programme as fair and age); and discusses the lessons to be learnt from the programme regarding effective implementation of organizational change. The main lessons indicate the importance of certain factors in implementing such programmes: (a) long-term management commitment to the programme; (b) appointment of agents of change/programme administrators; (c) establishment of a formal agreement between the parties involved; (d) establishment of communication channels between the parties involved; (e) intrinsic benefits for staff, perceived as incentives to economize; (f) reliable data, perceived to be reliable by the parties involved; (g) staff participation in the process of change; and (h) involvement of the participating unit as a single entity.

Administrative behavior of directors in hospitals: the Israeli case.

This article presents research findings on the behavior of directors in hospitals in Israel. According to the findings, hospital directors devote most of their time to internal organization processes and less time to the management of the external organizational environment. The findings also reveal that the orientation of these directors is toward centralization of authority and concentration of the decision-making process.

Formal and informal authority of hospital directors.

Describes and contrasts the perceptions of formal and informal authority of hospital directors of two different kinds of organizations: hospitals that are part of public multi-hospital organizations (PMOs) and independent hospitals. Indicates that all the directors perceive their formal authority to be greater than their formal authority. However, there is a gap in the perception of formal and informal authority by directors of the two types of hospital. Directors of independent hospitals perceive themselves to have more formal and informal authority than do their colleagues at hospitals that are part of PMOs. Both structural and personal explanations for these findings are given. In addition, discusses the implications for policy making of the source of authority, informal, and formal authority in the transition to autonomous semi-independent hospitals in a changing environment.