Remarks of Perry Pugno, MD on the Natl Project on Community Benefits

The following introduction to the National Project is excerpted from the Thirteenth National Conference on Primary Health Care Access, held in Bethesda, Maryland on March 22-24, 2002.

13th National Conference on Primary Health Care Access

Sunday, March 24, 2002

8:15 a.m.

“The National Project on Community Benefits of Family Practice Residency Training: the Larger Significance”

Perry A. Pugno, MD, MPH and William H. Burnett

Charles Henley, DO, MPH, Oklahoma State University College of Osteopathic Medicine, Tulsa:

The presentation we are about to hear is a follow-up to the National Workshop on the Community Benefits of Family Medicine held in Newport Beach, California September 21, 2001. We will begin our session with a report from that workshop from Doctor Perry Pugno and William Burnett. Dr. Pugno will speak first.

Perry A. Pugno, MD, MPH, American Academy of Family Physicians, Leawood, Kansas [Dr Pugno is a Senior Fellow of the Coastal Research Group]: Thank you. The scenario that prompts this conversation is a familiar one.

Perry A. Pugno, MD, MPH, American Academy of Family Physicians, Leawood, Kansas
Perry A. Pugno, MD, MPH, American Academy of Family Physicians, Leawood, Kansas

The typical event occurs in this way. A residency program director is sitting in his office, enjoying the position power and respect that program directors are accustomed to (cynical humor), when the chief financial officer of the host institution arrives with the report that the organization’s margins are narrowing, and that the residency program is a “cost center”, with a negative number. Therefore, you have two weeks to justify your program’s existence because the Hunter Group is coming.

The concept of justifying your existence is one that many of us are facing on an ongoing basis, certainly as hospital margins have narrowed and (especially in teaching hospitals) have turned into negative numbers. The attention to the bottom line has brought focus to many of our residency programs in adverse ways.

The challenge we face is to answer the question, is the profit and loss sheet for your “cost center” an accurate reflection of your contributions to the institution? Absolutely not! But very few of the chief financial officers or VPMAs that are delegated by the CFOs to assess your value are really aware of that.

The point and challenge of this project is to help you all proactively identify, catalogue, and to the extent possible, quantify, those contributions that you and your training programs make to your environment that do not show up on typical institutional financial reports (profit & loss sheets).

I will tell you it is true that the vast majority of training programs came into being by an action of the governing board of the hospital to meet some sort of an identified need. No board of trustees that I have heard of has ever decided to create a teaching program for the purpose of losing money.

That doesn’t happen. They have identified needs. They have problems with local patient access. They have problems with their primary care provider base. They have problems with service coverage of one sort or another. Residency programs are seen as solutions to those concerns.

For the more enlightened boards, there is a recognition that bringing in a training program almost immediately results in a raising of the standard of care in that institution. However, with time and turnover on institutional boards, there is frequently a loss of the institutional memory as to why the program is there.

Unless the residency program has made an overt effort to maintain that visibility with the board that brought them there, they may be reduced in the board’s mind to being one of many institutional cost centers.

The purpose of this project is to try to identify those areas of your program that have a direct and tangible benefit to the institution, and that do not show up on the financial sheets. The framework that we have used revolves around a taxonomy that includes a number of questions. If you do nothing else, as you leave this conference, take a few minutes to sit down and walk through these questions and decide how you would answer them.

You will quickly appreciate that having done so ahead of time and having collected some of the information that these questions address, certainly will be to your advantage when the “justifying your existence” call comes in.

The Joint Commission on Accreditation of Health Care Organizations (JCAHO) has given you a gift, despite the fact that you rarely think of the Joint Commission as an entity that does good things for you.

As of January 1, 2002, the new Commission ruling is that the institutional boards of community hospitals, for example, should be aware of what their training programs are doing. That gives you an entr?e to those people to remind them on a regular basis what you are doing to the benefit of their institution that does not show up in the financial sheets that they get from the CFO.

The taxonomy revolves around benefits on a number of levels. We have catalogued them in terms of the impact from the resident physicians themselves, including the spin-off benefits to the community, and the direct benefits to the institution from 24/7 coverage “no doc” admissions, and the establishment of a primary care base.

Our residency programs serve populations that in many communities can’t get access to the health care system otherwise. The residency program also brings into the community special services that they might not have otherwise.

Those of who are affiliated with universities bring great value to the university, not the least of which is a potential “reality -based” experience for their trainees. Finally, the programs make a contribution to the greater good of the greater community, such as health promotion and advocacy.

These are important things for you to think about and work on. As I get calls from programs across the country asking for help when the Hunter Group is coming, I frequently find myself asking, how many referrals to local specialists has your family practice center made in the last year?

The majority of places aren’t keeping track of that. That can be very powerful information. I was just talking this morning with Dr. James Cruz [of Pomona Valley Hospital in Pomona, California] who has collected that information ? something I have been “soapbox preaching” about for years. Much of what you do turns into real money for the sponsoring institution.

For example, we have repeated evidence that our teaching services provide care at an efficiency level exceeding that of most of the best hospital systems, to the extent of cutting from a half to a whole day off of the risk-adjusted average length of stay (ALOS).

In a managed care environment, multiplied by thousands of admissions, a half a day of length of stay means real money, and yet that benefit doesn’t ever show up on the bottom line of your residency’s financial balance sheet. So you need to step forward and collect some of this information and catalogue it in creative ways.

The purpose of this project is to try to help us do a better job of focusing and identifying what the benefits are in all of those domains. I will tell you that our first step in doing this is going to come out in June 2002.

Bill Burnett, John Midtling, Bill Gillanders and I recently put together a paper that we directed to the American College of Physician Executives’ publication. We are targeting towards the VPMAs and the chief medical officers of institutions who are frequently the ones delegated to look at your programs and decide on your “value”.

We put together a manuscript that outlines and explains and provides literature references for many of these indirect and intangible benefits that are real money to institutions and communities to set the stage and to provide you with a foundation upon which to build as you “justify your existence.” That publication will come out in June of this year.

One of the things that happens among physician leaders is that we tend to get focused on the “day to day” needs, such as the individual high maintenance resident problems, faculty challenges, and direct productivity challenges.

We don’t tend to put enough effort into collecting the background information that we need on a longitudinal basis to maintain and grow the appreciation and support for our residency programs. We really need to do it ? and plan on winning. If we don’t do it, then we have no one to blame but ourselves.