The state of the business of medicine today

The ‘business of medicine’ sounds like a contradiction of terms.

“The Business of Medicine”, sounds almost like a contradiction of terms. The great profession, the honorable calling, the foregoing of self for the sake of others. Now the profession has been reduced to that of widget makers. We run on a system called “RVU’s”, or relative value units. This is an archaic system that is based on diagnoses as well as volume. Despite all our attempts, the U.S. continues to fail in its delivery of health care and in its outcomes.

If Medicine is to be run like a business, then let it be one where the patient truly comes first. This is, of course first and foremost. From a business and a humanity perspective, we must never forget this. Having said this, let us learn from the discipline of Business, both from successes and from its failures.

A good model to use is taken from Dr. W. Edwards Deming, in his treatise on “The Five Deadly Diseases 1984”. Deming is the post-World War II American statistician who brought Japan out of the ravages of the war and helped create the economic powerhouse that they are today.

In this article, I will take each of his claims and compare them to the business practices of medicine today. This comparison does not relate to any specific, hospital, insurer, or healthcare system, but to Medicine as a whole.

1.Lack of Constancy of Purpose: Deming refers to planning production and services such that they will have the ability to continue, ever looking forward and pushing decisions to those who know the most about the issue at hand. Innovation, research and education, as well as improvement of design, are key points here. How does this specifically relate to medicine. We continue to be short sighted. For example, insurers may pay for certain expensive treatments but continue to have little focus on prevention. Although this has improved to some degree, we certainly have light years to go. We still have difficulty obtaining medications for smoking cessation as one of many examples. Other areas where this principal of Deming applies is allowing those who are the most educated about a topic to contribute to decisions that affect them and their patients. Providers need to work at the highest level of their education and not spend the majority of their time with desk and computer tasks. In an article in Medical Economics referenced below, it is estimated that providers spend 49% of their time on EHR and desk work, and only 27% of their time in face-to-face care of their patients. Another issue worth mention is Education. In an RVU system, education is often de-emphasized. There is a push to produce, aiming for ever higher production levels. This comes at the expense of spending time with our patients, collegial interaction with our peers and frankly of education in general. This culture fosters the building of silos, contributing to a lack of morale, depression, and as many statistics have shown, even suicide.

2.Emphasis on short term profits, short term thinking. A fear of being “outdone” or of an unfriendly takeover. Many times, health systems base earnings or successes on quarterly data, which may in fact sacrifice the future of providers, the community they serve, and the institution as a whole. They may overreach, overspend, and overemphasize the wrong short-term goals, losing site of how these decisions will affect us all in the future. In Medicine, Health systems acquire other practices, or other health related businesses, expanding their reach ever further. There seems to be a fear of partnering with other entities. “We have to look good”. Squash the competition. Subdue the best and the brightest to protect our own position. Utilize draconian noncompete contracts that may force a medical provider out of the community they have been serving. There is an overwhelming sense of control, and essentially of ownership of the provider. This effects morale, and causes a loss of talent from the community, often impacting the patient and the practitioner the most. The skills and ties that the individual had provided to the community are lost. These may have been utilized not only by those who require these services but of the system itself and constitute a major loss for every stakeholder.

3.Merit rating or annual review. Sounds reasonable, does it not? But as Deming has said, “pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise. “Part of the argument is that in the professional healthcare environment, perhaps 90plus percent of performance is based on the interaction with colleagues, those around them and the very system they work in. The suggestion Deming makes here is that true improvement should focus on systems, processes, and methods, not on the individual. Focus on the individual, in his opinion, was a low yield strategy. We fail to ask the “why”, and instead focus on the “who”. “Who” didn’t clean up that spill outside of the recovery room, not “why” was it not cleaned up and made safe. This concept is admittedly a bit hard to swallow but stepping back from our ingrained culture and way of doing things, I feel that many of us can indeed see the value in this perspective.

4.Mobility of management. This theory rales against rapid turnover of management. Managers may often hop from position to position in an organization, never really understanding the system as a whole. Metrics are created to showcase the success of the manager instead of making metrics that will benefit the organization. One of the interesting observations is that in Japan, an industrial powerhouse for a country with such a small land mass, is that upon finishing school, an individual will go to the factory floor, work the assembly line, deliver product, for years, finally moving to a higher management position. This builds an intricate working knowledge of the company, a buy in, a sense of belonging. This person is able to fully understand the culture, to observe and learn from past failures and successes and to earn the respect of his colleagues. Many CEOs of major corporations will only stay there, on average, for 4 years. They may be engaged in “empire building” or taking on projects that have an ultimate negative present value, setting up artificial successes and enabling them to move on to a higher position with another company. Although these projects initially look good, increasing the volume of those entities under the company’s control, they may ultimately lead to failure. “It was running quite well when I left”. Unfortunately, these scenarios play out all too often in healthcare systems.

5.Management using only visible figures with little or no consideration of figures that are unknown or unknowable. Sounds confusing out of the gate, so what is really meant here?

Just measuring data falls short of what is needed to successfully run Medicine as a Business. Many things that affect a System that we simply cannot put a number on must still be accounted for. How does an unhappy patient affect a Health System? What about a disgruntled provider?

These are very important aspects to regard in the business of Medicine, and we must account for them, even though they may be difficult and or near impossible to measure.

These issues may certainly paint a rather bleak picture, but all is not lost. We must first agree that a problem exists, and I’m certain that most of us can agree on this point. We then must work on correcting our “deadly diseases”. For the good of the business, we call Medicine, for our community, and most importantly for our patients. The lessons put forth by Doctor Deming, (and the points I’ve mentioned represent only a very small portion of what he has offered) can certainly serve as a springboard for change.

Vincent A. Cantone, MD, FAAP, FACP, is an internist and pediatrician currently pursuing an MBA through John’s Hopkins Carey School of Business.


1.Anderson, P. (May 8,2018) Doctors’ Suicide Rate Highest of Any Profession.

2.Bendix, J. (April,2022) Destroy Busy Work. Medical Economics,99(4),22-25

3.The W. Edwards Deming Institute. (n.d.)Seven Deadly Diseases of Management.

4.The W. Edwards Deming Institute. (Sept 21,2015).Create Constancy of Purpose.

5.The W. Edwards Deming Institute. (Jan9,2017).Deadly Disease of Management: Emphasis on Short-Term Profits.

6.The W. Edwards Deming Institute. (Oct 29,2012). Dr. Deming Called for the Elimination of the Annual Performance Appraisal

7.The W. Edwards Deming Institute. (July 15,2013). Mobility of Management

8.The W. Edwards Deming Institute. (August 13,2015). Myth: If You Can’t Measure It, You Can’t Manage It.

9.(Dr.W. Edwards Deming-guest). (Chuck Olin Associates, Inc, Chicago-Producer). (1984)Dr.Deming-The 5 Deadly Diseases. An Encyclopaedia Britannica Film