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Measuring Physician Contribution to the Healthcare Safety Net
There are an estimated 46 million Americans without health insurance and an even larger number for whom health insurance does not cover all needed medical services. These individuals and families have to rely more and more on government programs and physicians' willingness to provide uncompensated services, most often described by providers as charity care. Previous studies have shown a downward trend in the percent of physicians willing or able to provide charity care. We extend this research by examining the results of the Medical Group Management Association's Cost Survey of Medical Group Practices for 2005, 2006, and 2007. It is important to examine the uncompensated care reported by medical groups because groups have policies that may govern how much, if any, charity care their physicians provide. This survey data shows that, overall, the number of medical practices providing charity care continues to decline. The results and analysis of the survey data indicate that uncompensated (charity) care is being offered by less than half of medical practices, and at less than 2% of total gross charges. We examined the results by potential explanatory variables: population density, practice size, physician practice specialty, practice ownership structure, payer mix, and practice financial performance. Results were consistent across all categories; charity care is declining. These results have major policy implications for both the federal government and all state governments, especially in light of the current recession and proposed healthcare reform legislation. -
A Defense of Direct-to-Consumer Prescription Drug Advertising
Within the past 20 years, consumer advertising of prescription drugs has grown from a rarity to one of the most pervasive forms of consumer advertising, with ads for antidepressants and heart medications now as common as those for fast food and automobiles. At the same time, direct-to-consumer (DTC) advertising has attracted a growing chorus of criticism from consumer advocates, health professionals, and elected officials. This article explores the extent to which such criticism has merit and the extent to which it lacks soundness. Specifically, the article casts doubt on the charges that (1) DTC advertising is deceptive; (2) DTC downplays product risks; (3) DTC focuses on trivial or imaginary maladies; (4) DTC doesn't promote non-pharmaceutical solutions to health problems; (5) DTC harms the doctor-patient relationship; and (6) DTC is responsible for the rapid rise in drug costs. -
Women in Management: Delusions of Progress
New research shows that female managers continue to lag behind men at every career stage, right from their first professional jobs-and that's among graduates from elite MBA programs. The aggressive efforts this past decade to create opportunities for women weren't nearly as fruitful as we'd thought. To achieve anything close to gender equality, organizations have a lot of work to do. -
The Soot Opportunity
Though CO2 reduction remains crucial in the fight against climate change, businesses and social entrepreneurs should also set their sights on the number-two contributor to global warming: black carbon. Scrubbing soot from your operations is often easier than reducing CO2 and can provide a quicker payback for the environment and the firm. -
Engaging the "Pole Vaulters" on Your Staff
If you classify your employees into four types (Grand Prix Drivers, Pole Vaulters, Long-Distance Runners, and Flatliners) and customize engagement programs to meet their needs, the authors' research suggests, you'll be rewarded with workers who display more motivation, more loyalty, and better performance. -
One Cafe Chain's Facebook Experiment
How much can you really influence consumers when you launch a Facebook page to attract "fans" and to pepper them with messages and offers? Quite a lot, one small cafe chain found. -
The Mere Thought of Money Makes You Feel Less Pain
Can cold, hard cash actually make you feel stronger? Yes, says professor Kathleen Vohs, whose studies showed that handling money actually reduced research subjects' physical and psychological pain levels. In fact, even pictures of cash had the same effect. Her research shows that money makes people more self-sufficient and more motivated-though it also makes them less helpful, less social, and less charitable. Her findings have interesting implications for companies in their dealings with customers as well as in their efforts to motivate employees. -
A Better Approach to China's Markets
Most companies treat all big cities in China as one animal, all growing cities as another. It's much more effective to define markets by economic outlook, consumer attitudes, and culture. -
Think Outside the Building
The greatest future breakthroughs will come from leaders who encourage thinking that extends beyond the company. -
Who Do These Bankers Think They Are?
Even with better regulation, the prognosis doesn't look good for financial markets. We have bankers to thank for that. -
Funding Eureka!
Nathan Myhrvold, the cofounder of Intellectual Ventures, has been reviled as a patent troll - a renegade who buys up patents and uses them to hold up companies. Nothing could be further from the truth, Myhrvold argues. What he's really trying to do is create a capital market for generating and trading inventions that's akin to the venture capital market supporting start-ups and the private equity market that revitalizes inefficient companies. Without such a market, inventors who work at companies, universities, or on their own are starved of the cash and expertise they need to solve today's complex problems. A professional invention capital industry would remedy this problem, and the number of inventions would dramatically rise, transforming the world for the better. -
Finding Your Strategy in the New Landscape
The 2008 crash hit cross-border business hard. The value of international trade was projected to decline by as much as 9% in 2009. Foreign direct investment has plunged even more: After dropping 15% in 2008, it fell by more than 40% in 2009. Though we may have reached the bottom, the prospects for the medium term don't look promising. For much of the next decade, we can reasonably expect to see weak global growth, pressures from overcapacity, persistently high unemployment, costlier capital, a greatly expanded role for governments, a much larger burden of taxation and regulation for all, and maybe even increased protectionism. It goes without saying that global firms must factor these developments into their strategies for the new decade. To successfully negotiate the rockier path before them, they must rethink their strategic vision and retool their approach to each component of strategy: product and market focus, organizational and supply chain structures, talent management choices, and, of increasing importance, the management of corporate reputation and identity. In particular, firms will need to work harder to adapt to local differences and pay more attention to developing countries-as markets, as launch pads for formidable new competitors, and as sources of process innovation. -
Roaring Out of Recession
What strategies can companies use to both survive a recession and thrive when it ends? The authors studied the strategy selection and corporate performance of 4,700 public companies during the past three global recessions: 1980 to 1982, 1990 to 1991, and 2000 to 2002. They found that of companies that survive a recession, about 80% take more than three years to regain their prerecession growth rates for sales and profits. Just 9% of them flourish after a slowdown, doing better on key financial parameters than they had done before it and outperforming rivals in their industry by at least 10% in terms of sales and profits growth. One strategy has the greatest likelihood of producing postrecession winners: a combination of cutting costs, mainly by improving operational efficiency (rather than by slashing the number of employees relative to peers), and developing new business opportunities by making significantly greater investments than rivals do in R&D and marketing while also investing in plants and machinery. -
Are You Ready to Rebound?
As companies recover from recession, their ability to execute is more important than ever: Recovering markets do produce opportunities, after all. Regulations are changing, as are your competitors' structures and your consumers' preferences. Will your company be ready to seize these chances for growth? Seven questions can help you gauge your execution agility: (1) Do you miss opportunities that others spot? (2) Are your hydraulics broken? (3) Do you reward mediocrity and call it teamwork? (4) Are your core values a joke? (5) Are you talking about the wrong things? (6) Have your Vikings become farmers? (7) Do you rely on heroic leadership? -
Bold Retreat: A New Strategy for Old Technologies
A superior new technology emerges on the horizon, threatening your existing business. Do you strive to make a seamless transition to it or, perhaps, try to fight and defeat it? Both of those responses can be losing strategies. A third, frequently superior, option is one of "bold retreat," whereby your company cedes most of the established market to the new, dominant technology and instead pursues less vulnerable positions - not as a "turn tail and run" reaction but as a proactive, strategic alternative to head-on competition. There are two types of bold retreats: (1) retrenchment to a niche of the traditional market, where the old technology has an advantage over the new one in addressing customer needs; and (2) relocation to a new market, where the old technology is the inherently superior offering. You can even incorporate both moves into an effective strategy. Like a transition to a new technology, a bold retreat requires significant organizational change. That includes revamping your cost structure and talent base, not to mention selling the very idea of "retreat" to your internal stakeholders. Despite such challenges, a bold retreat that is carried out with foresight can be both a survival strategy and a success story. -
Harnessing Your Staff's Informal Networks
If your smartest employees are getting together to solve problems and develop new ideas on their own, the best thing to do is to stay out of their way, right? Well, think again. For years, loosely organized employee networks have been helping companies find creative solutions to challenges that bridge functional gaps. Composed of on-staff experts who got together to share information and insights, these "communities of practice" often generated improvements that saved firms dramatic amounts of money and time. Not wanting to crush these groups' collaborative nature, managers let them operate independently, off the grid. But as business became more global and technology multiplied the tools and information available to experts exponentially, community members found it harder to dedicate time to these voluntary groups. Communities started to fail. They didn't die, however; they evolved, becoming integrated into companies' formal structures. Today they're an actively managed part of the organization, with clear accountability and executive oversight. The most effective communities address issues that are critical to the organization and strive to meet specific, long-term goals. Companies assign them official management sponsors and full-time staff, train their leaders, and even make participation in them part of employees' performance criteria. -
Leadership Lessons from India
Until recently India was seen by Western businesses primarily as a source of cheap, low-skill labor. But over the past decade the country has attracted a flood of high-skill jobs from the West. Meanwhile, India's economy has grown at roughly 9% a year, and some of its largest companies have grown at twice that rate. What accounts for this? A host of economic, policy, and other environmental factors have played important roles, but the authors ascribe much of this success to the distinctively inward-focused managerial approach of Indian leaders. Through interviews at 98 of the largest India-based companies, they have identified four ways in which these leaders develop and motivate employees: Far more than their Western counterparts, they create a sense of social mission, engage employees in give-and-take, empower them to find solutions, and invest in their training and development. Western leaders should understand the managerial approaches that have fueled the rise of India's largest companies, and mindfully adapt them. -
How BMW Is Defusing the Demographic Time Bomb
In June 2007, Nikolaus Bauer, the head of BMW's 2,500-employee power train plant in Dingolfing, Lower Bavaria, asked two of his production line managers, "How are we going to maintain our productivity as the workforce gets older and older?" BMW is not the only company with this concern. Corporate leaders, politicians, and labor economists in most developed nations are worried about the consequences of demographic change in their labor markets, which increasingly consist of older workers. Instead of turning to traditional approaches-firing older workers, forcing them into early retirement, or moving them to less physically demanding jobs-managers at the BMW plant let the workers themselves find a solution. The company staffed a production line with people who were, on average, 47 years old-reflecting the plant's projected demographic makeup in 2017. The workers on this pilot line, supported by senior management and technical experts, then developed and implemented 70 productivity-enhancing changes, such as managing health care and making small changes to the workplace environment. The total cost of the changes was just around 40,000 euros, but the result was a productivity increase of 7% in one year. BMW is now testing this worker-led approach in other types of plants in the United States, Germany, and Austria in order to develop standards for incorporation across the company's manufacturing organization. As global companies come to grips with the strategic challenges in the years ahead, they may find that the brainpower of their workforce is the most important differentiating factor. -
Giving Up the CEO Seat
The CEO and cofounder of Seventh Generation, a maker of environmentally responsible household and personal care products, describes how he came to realize that although he'd been the right person to guide his company through its infancy and adolescence, he was not the right one to take it into full-fledged adulthood. Having made the decision to step down, he had to determine the best way to proceed: How quickly should he move? How public should he be? How would he get buy-in from the board and the company's associates? How would he ensure that Seventh Generation's fierce commitment to social and environmental sustainability endured? Most important, was he doing the right thing? -
Keeping Your Colleagues Honest
Just promoted from the accounting group at headquarters, Jonathan is now the controller for a regional sales unit of a consumer electronics company-and he realizes in short order that the next quarter's sales are being reported early to boost bonus compensation. The group manager's silence suggests that this sort of thing has probably happened before. This may seem like a mundane accounting matter, but the consequences-in terms of carrying costs, distorted forecasting, compromised ethical culture, and even legal ramifications-are very serious. And except in extraordinarily well-run corporations, managers face situations like this all the time. You know something's wrong. You know you need to make it stop. But you don't necessarily know when to speak up, how to speak up, and, most important, how to be effective. Drawing on the author's research over the past four years, this article walks you through the rationalizations commonly used to justify unethical behavior-everything from "this is just how things work in our industry" to "it's not your job to fix this; stick to your knitting." It also gives concrete advice about how to raise your voice effectively. For example, treat the conflict as a business matter. Nobody wants to hear a self-righteous little speech about honesty, so get your facts in order and present them effectively. You should also challenge the rationalizations. If this is "just how things work," ask whether the organization is comfortable going public with the practice. All managers should know how to respond constructively to ethical issues, and senior managers must be able to change the cultural norms that gave rise to bad judgment in the first place.