Changing Today's Health-Care Hierarchy

INSIDE the bustling, predominantly black and poor Ballou High School here, the hospital of tomorrow is already at work. A school-based clinic, run by the Greater Southeast Healthcare System, provides students with basic care, referrals, and most important, health education.

``At the heart of health-care reform is not only provider networks, but individuals and community networks working together,'' says Michelle LeSane, community-relations director for Greater Southeast.

Many health-care experts agree, but caution that such a cooperative approach will require hospitals, doctors, and patients to change the way they view themselves and their responsibilities to each other.

Without that, they contend, no reform can succeed, however well-regulated.

The experience of Greater Southeast is a case in point. Ten years ago, the non-profit, community hospital faced a bleak future. It was dependent on inadequate reimbursement from Medicare and Medicaid and gave away $11.5 million in services to the uninsured, about 11 percent of its budget.

``We made a judgment that we couldn't stand still, we had to work smarter as well as harder,'' said Tom Chapman, president and chief executive of Greater Southeast. Changing for success

Mr. Chapman began by improving the running of the hospital. Then it became evident that many patient needs were tied directly to community poverty, illiteracy, drugs, and violence. ``The health-care problems that we are all facing are just a reflection of communities that have begun to deteriorate. You have to deal with both,'' Chapman says.

Greater Southeast first reached out by starting an elder day-care program in its basement. The more it focused on the needs of the community, the faster the process snowballed.

The company is now thriving with two hospitals, three nursing homes, a physician-care network, a school-based clinic, and more than 50 community programs. It is a model of the provider network the Clinton reform proposal encourages.

``I think the meaning of the term hospital is going to change,'' says James Bentley, senior vice-president for policy of the American Hospital Association.

Under the current system, hospitals are rewarded financially for using expensive, high-tech procedures and emergency care. Under the proposed system, low-cost preventive care would be rewarded.

The Clinton proposal uses market forces to change the incentives. Provider networks, like Greater Southeast, will contract with insurers and firms to provide patient care for a set fee. Insurance companies will then compete for customers in regional purchasing pools called health alliances.

Here's one example of how the change is supposed to save money as it improves health care.

Currently, only 7 percent of the babies born in the United States are of low birth-weight. But they consume 60 percent of all hospital nursery resources. A primary cause of low birth weight is lack of prenatal care, which most conventional insurance plans do not cover.

Under a managed-care system, hospitals and doctors have a set amount to spend per patient. That gives them a financial incentive to offer services like prenatal care, because nine visits to a doctor's office are much less expensive than nine months in an infant intensive-care-unit.

``The biggest shift is that people are going to have to start thinking more in terms of the needs of the populations they care for,'' Mr. Bentley says.

But critics of managed-care systems contend just the opposite will happen. They argue that providers will be so concerned with saving money that they will cut corners, thus driving down overall quality.

``You're going to have a switch from mostly caring, concerned doctors to the bureaucratic, punch-the-clock kind of physician,'' says Dr. Stephen Cohen, president of the National Organization of Physicians Who Care, a group opposed to the Clinton reform effort. Quality assurances

Dr. Nancy Dickey, a trustee of the American Medical Association, says that is a concern, but one that can be addressed.

``I think it falls on the shoulders of the profession to put into place quality assurance systems, to try to find patterns that a particular physician is ordering too few tests, or cutting too many corners,'' says Dr. Dickey. ``Then, it will also fall onto the patients to seek guidance about which tests are necessary.''

The shift to managed care will also change the medical establishment's hierarchy. Specialists currently have the most esteem. They tend to work fewer hours, have less patient contact, and make more money than family doctors.

The new emphasis on managed care is expected to give new cachet and financial rewards to primary-care doctors. Health-care plans will rely on them to prevent unnecessary and costly visits to specialists.

The lives of many primary-care physicians are expected to change in other ways, as well. Take Nancy Dickey. She is part of a small family practice in tiny Richmond, Texas, about 35 miles south of Houston.

She expects her group will eventually have to link up with other health-care providers to create a network that can compete for contracts with insurance companies. But in return, she will probably have to lose some independence.

``Will all of this come about instantaneously or painlessly?'' Dickey asks. ``Probably not, but if we put our heads together we can put together a system that will serve Americans with lower costs and the same high quality they've come to expect.''