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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.

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 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

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 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

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 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

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 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
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 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
Discussion Questions.......................................................................... 128
References........................................................................................... 128

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

Management....................................................................................... 133
Learning Objectives............................................................................. 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
Discussion Questions.......................................................................... 161
References........................................................................................... 161

Chapter 6 Third-Party Payers, the Revenue Cycle, and the Medical Practice........ 165
Learning Objectives............................................................................. 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

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 xii Detailed Contents

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

Discussion Questions.......................................................................... 199
References........................................................................................... 199

Chapter 7 Financial Management and Managerial Accounting in the

Physician Practice................................................................................ 205
Learning Objectives............................................................................. 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
Discussion Questions.......................................................................... 231
References........................................................................................... 231

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

Learning Objectives............................................................................. 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
Discussion Questions.......................................................................... 272
References........................................................................................... 272

Chapter 9 Leading, Managing, and Governing Within Organizational

Dynamics............................................................................................ 279
Learning Objectives............................................................................. 279
Introduction........................................................................................ 279

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 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
Discussion Questions.......................................................................... 309
References........................................................................................... 309
Additional Reading............................................................................. 313

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

Learning Objectives............................................................................. 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
Discussion Questions.......................................................................... 339
References........................................................................................... 339

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

Learning Objectives............................................................................. 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

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 xiv Detailed Contents

Special Situations................................................................................ 358

Collaborative Emergency Management............................................... 368
Discussion Questions.......................................................................... 368
References........................................................................................... 369

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

Learning Objectives............................................................................. 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
Discussion Questions.......................................................................... 416
References........................................................................................... 416

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

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

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 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

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 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.

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