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Chapter 7 Committees and Teams
The Nature of Committees
The Purposes and Uses of Committees
Limitations and Disadvantages of Committees
Enhancement of Committee Effectiveness
The Committee Chairperson
Committee Member Orientation
Minutes and Proceedings
Where Do Teams Fit In?
As Employee Involvement Increases
Employee Teams and Their Future
Exercise: Committee Structures
Case: The Employee Retention Committee Meeting

Chapter 8 Budget Planning and Implementation

The Revenue Cycle
The Budget
Uses of the Budget
Budget Periods
Types of Budgets
Approaches to Budgeting
The Budgetary Process
Capital Expenses
Supplies and Other Expenses
The Personnel Budget
Direct and Indirect Expenses
Budget Justification
Budget Variances
The General Audit
Sample Budget: Health Information Service
Exercise: Adjusting the Budget

Chapter 9 Training and Development: The Backbone of Motivation and Retention

Employee Development
Orientation
Training
Mentoring
Clinical Affiliation/Clinical Practice Program and Contract
Exercise: What to Do When Budget Cutting Threatens Training?
Case: The Department’s “Know-It-All”
 Appendix 9–A: Training Design: Release of Information

Chapter 10 Adaptation, Motivation, and Conflict Management

Adaptation and Motivation
Theories of Motivation
Practical Strategies for Employee Motivation
Appreciative Inquiry
Motivation and Downsizing
Conflict
Organizational Conflict
Discipline
The Labor Union and the Collective Bargaining Agreement
Labor Unions in Health Care: Trends and Indicators
Case: A Matter of Motivation: The Delayed Promotion
Case: Charting a Course for Conflict Resolution—“It’s a Policy”
Notes
Appendix 10–A: Sample Collective Bargaining Agreement

Chapter 11 Communication: The Glue That Binds Us Together

A Complex Process
Communication and the Individual Manager
Verbal (Oral) Communication
Written Communication
Communication in Organizations
Orders and Directives
Case: The Long, Loud Silence
Case: Your Word Against His
Notes

Chapter 12 The Middle Manager and Documentation of Critical Management

Processes
The Strategic Plan
The Annual Report
The Executive Summary
Major Project Proposal
Business Planning for Independent Practice
The Due Diligence Review
Exercise: Preparing Your Business Plan
Appendix 12–A: Newman Eldercare Services, Inc.: Strategic Plan
Appendix 12–B: Annual Report of the Health Information Services
 Appendix 12–C: Executive Summary: Annual Report of the Health
Information Services
Appendix 12–D: Sample Project Proposal for Funding

Chapter 13 Improving Performance and Controlling the Critical Cycle

Quality, Excellence, and Continuous Performance Improvement
The Search for Excellence: A Long and Varied History
The Management Function of Controlling
Benchmarking
Tools of Control
The Critical Cycle
Exercise: Choosing an Adequate Control Mechanism—What Fits Best?
Exercise: Promoting Total Quality Management
Note

Chapter 14 Human Resources Management: A Line Manager’s Perspective

“Personnel” Equals People
A Vital Staff Function
A Service of Increasing Value
Increase in Employee-Related Tasks
Learning about Your Human Resources Department
Putting the Human Resources Department to Work
Some Specific Action Steps
Further Use of Human Resources
Wanted: Well-Considered Input
Understanding Why as Well as What
Legal Guides for Managerial Behavior
An Increasingly Legalistic Environment
Emphasis on Service
Case: With Friends Like This ...
Case: The Managerial “Hot Seat”
Note

Chapter 15 Day-to-Day Management for the Health Professional-as-Manager

A Second and Parallel Career
Two Hats: Specialist and Manager
A Constant Balancing Act
The Ego Barrier
The Professional Managing the Professional
Leadership and the Professional
Some Assumptions about People
Style and Circumstances
The Professional and Change
Methods Improvement
Employee Problems
Communication and the Language of the Professional
An Open-Ended Task
The Next Step?
Case: Professional Behavior—The Bumping Game
Case: Delegation Difficulties—The Ineffective Subordinate
Notes

Index
 Preface

This book is intended for healthcare professionals who regularly perform the classic
functions of a manager as part of their job duties—planning, organizing, decision making,
staffing, leading or directing, communicating, and motivating—yet have not had extensive
management training. Healthcare practitioners may exercise these functions on a continuing
basis in their roles as department directors or unit supervisors, or they may participate in only
a few of these traditional functions, such as training and development of unit staff. In any
case, knowledge of management theory is an essential element in professional training,
because no single function is ever addressed independently of all others.
In this book, emphasis is placed on definitions of terms, clarification of concepts, and, in
some cases, highly detailed explanations of processes and concepts. The examples reflect
typical practices in the healthcare setting. However, all examples are fictitious and none are
intended as legal, financial, or accreditation advice.
Every author must decide what material to include and what level of detail to provide. The
philosopher and pundit Samuel Johnson observed, “A man will turn over half a library to
make one book.” We have been guided by experience gained in the classroom, as well as in
many training and development workshops for healthcare practitioners. Three basic
objectives determined the final selection and development of material:
1. Acquaint the healthcare practitioner with management concepts essential to the
understanding of the organizational environment within which the functions of the
manager are performed. Some material challenges assumptions about such concepts as
power, authority, influence, and leadership. Some of the discussions focus on relatively
new concepts such as appreciative inquiry approaches to motivation and conflict
management, cultural proficiency and diversity training, changes in credentialing, and
job duties of technical support personnel. Practitioners must keep abreast of developing
trends in management, guarding against being “the last to know.”
2. Provide a base for further study of management concepts. Therefore, the classic
literature in the field is cited, major theorists are noted, and terms are defined,
especially where there is a divergence of opinion in management literature. We all stand
on the shoulders of the management “giants” who paved the way in the field; a return to
original sources is encouraged.
3. Provide sufficient detail in selected areas to enable the practitioner to apply the
concepts in day-to-day situations. Several tools of planning and control, such as budget
preparation and justification, training design, project management, special reports (e.g.,
the annual report, a strategic plan, a due diligence assessment, a consultant’s report),
and labor union contracts, are explained in detail.
We have attempted to provide enough information to make it possible for the reader to use
these tools with ease at their basic level. It is the authors’ hope that the readers will contribute
to the literature and practice of healthcare management as they grow in their professional
practice and management roles. We are grateful to our many colleagues who have journeyed
with us over the years and shared their ideas with us.
Joan Gratto Liebler
Charles R. McConnell
 About the Authors

Joan Gratto Liebler, MA, MPA, RHIA, is Professor Emerita, Health Information
Management, at Temple University, Philadelphia, Pennsylvania. She has more than 36 years
of professional experience in teaching and research in healthcare settings. In addition to
teaching, her work and consulting experience include engagement with community health
centers, behavioral health settings, schools, industrial clinics, prisons, and long-term care,
acute care, and hospice facilities. She has also been an active participant in area-wide
healthcare planning, end-of-life care coalitions, and area-wide emergency and disaster
planning.
Ms. Liebler is also the author of Medical Records: Policies and Guidelines and has
authored numerous journal articles and contributed chapters relating to health information
management.
Ms. Liebler holds the degrees of Master of Arts (concentration in Medical Ethics), St.
Charles Borromeo Seminary, Philadelphia, Pennsylvania, and Master of Public
Administration, Temple University, Philadelphia, Pennsylvania. She is a credentialed
Registered Health Information Administrator.
Charles R. McConnell, MBA, CM, is an independent healthcare management and human
resources consultant and freelance writer specializing in business, management, and human
resources topics. For 11 years he was active as a management engineering consultant with the
Management and Planning Services (MAPS) division of the Hospital Association of New
York State (HANYS), and he later spent 18 years as a hospital human resources manager. As
author, coauthor, and anthology editor, he has published more than 30 books and has
contributed several hundred articles to various publications. He is in his 35th year as editor of
the quarterly professional journal The Health Care Manager.
Mr. McConnell received a Master of Business Administration and a Bachelor of Science
degree in Engineering from the State University of New York at Buffalo.
 What’s New in the Seventh Edition

Management Principles for Health Professionals, Seventh Edition continues to present

foundational principles of management in the context of contemporary health care. The
Seventh Edition reflects current issues by linking them to basic principles. Newly added
examples include corporate compliance, standards of conduct and mandatory reporting,
eHealth (its expansion, plus issues relating to reimbursement), revenue cycle considerations,
cultural competency and diversity training, and comparative effectiveness reviews. There is
continuing expansion of material relating to the Health Insurance Portability and
Accountability Act (HIPAA), electronic health records/personal health records, due diligence
reviews, and healthcare reform legislation.
Examples and exhibits have been updated throughout. Examples reflect a wide variety of
settings, including acute care, observation units, urgent care, rural critical access care
facilities, neighborhood health centers, secure personal care units, continuing care facilities,
and rapid treatment centers. These examples feature various patient groups, including the
frail elderly, at-risk youth, and homeless youths and adults. A full-scale plan, with 500-day
implementation schedule, is included to illustrate project management. Newly emerging
jobs/positions are included, such as compliance officer, privacy specialist, data quality and
analysis specialist, and contractual management teams.

SPECIFIC CHAPTER UPDATES

Chapter 1, “The Dynamic Environment of Health Care,” presents a template for analyzing
megatrends in health care with attention to clients, families as caregivers, professional
practitioners, the healthcare marketplace and settings, the impact of technology (including
eHealth and virtual health), data mining, the health information exchange, and social/cultural
factors. An expanded section on financing and reimbursement is included. The characteristics
of the effective manager are delineated.
Chapter 2, “The Challenge of Change,” includes detailed examples relating to the
continued implementation of the electronic health record (including outreach campaigns and
meaningful use initiatives), the organizational restructuring resulting from marketplace
forces, and continuing impact of healthcare reform legislation.
Chapter 3, “Organizational Adaptation and Survival,” includes expanded discussion of
competition and adversarial relationships. Extensive analysis of the effects of mergers, partial
or full closure of a facility, and the final stages in the organizational life cycle is made. The
main features of the manager’s concerns and activities during this phase are amplified.
Chapter 4, “Leadership and the Manager,” was formerly Chapter 12, “Authority,
Leadership, and Supervision.” The material concerned with knowing one’s own leadership
style has been expanded. Information presented on orders and directives has been moved to
Chapter 11, “Communication,” and the discussion of supervision and discipline has been
moved to Chapter 10, “Adaptation, Motivation, and Conflict Management.”
Chapter 5, “Planning and Decision Making,” adds material relating to the consequences of
delaying decision making or not making decisions at all, along with the second- and third-
order impact of decisions. More examples of the after-action report are included. Under the
topic of planning, project management is presented, including the role of the project manager
along with project evaluation through process and outcome reviews. A complete project,
coupled with a 500-day implementation plan, is provided to illustrate the extensive nature of
project delineation, activity description, and evaluation cycles.
Chapter 6, “Organizing,” provides additional discussion of the job analysis, classification,
and job description interrelationship. New/emerging/changing job titles and responsibilities
are included (e.g., corporate compliance officer, data quality specialist, privacy officer).
Standards of conduct and mandatory reporting are added to the orientation module. The role
and function of the external, contract management team is delineated. The changing
characteristics of the work force are highlighted. The management inventory to forecast
staffing needs is developed. The consultant report reflects current issues relating to transition
from hard copy to electronic health records, and the resulting legacy systems, changes in data
entries, studies relating to shorter stay admissions compared to balance-of-life admissions in
skilled care, the necessity of studies relating to patterns of readmission to acute care, and
studies about secure personal care units (including suspected elder abuse because of
involuntary seclusion).
Chapter 7, “Committees and Teams,” offers refined and expanded information concerning
employee teams and their legality and advice and guidance for building and maintaining a
departmental team.
Chapter 8, “Budget Planning and Implementation,” is essentially the same as the former
Chapter 7, “Budgeting: Controlling the Ultimate Resource.”
Chapter 9, “Training and Development: The Backbone of Motivation and Retention,”
includes new material that reflects diversity and cultural competence. New material has also
been added to address the mutual responsibilities, and the elements of an affiliation
agreement/contract between the healthcare organization and external academic programs for
clinical practice rotations. Additional aspects of the training design are included to reflect the
needs assessment for training, aspects of interpersonal skills, and challenges associated with
difficult client interaction.
Chapter 10, “Adaptation, Motivation, and Conflict Management,” includes an explanation
of motivational strategies for dealing with crisis incidents. The impact of downsizing is
explained in detail, including the environment created when layoffs occur, the effects on
employees who must be released, and the reactions of “survivors” who are expected to do
more with less at a time when morale and motivation have been adversely affected. Labor
union trends and issues are highlighted, and the sample labor contract has been updated.
Chapter 11, “Communication: The Glue That Binds Us Together,” formerly Chapter 14,
stresses plans and preparations for addressing communication during a crisis via the need for
disaster planning. Material concerning “the grapevine” and the manager’s role in rumor
control is presented, and information concerning orders and directives has been moved here
from an earlier chapter.
Chapter 12, “The Middle Manager and Documentation of Critical Management
Processes,” includes full-scale examples of reports, strategic plans, and due diligence
reviews. Current points of emphasis, including regional health information exchanges,
telecommuting issues, upgrading job titles and content (including certifications and
qualifications), participation in clinical practice programs, and achievements related to
external rating reviews (e.g., Medicare Five-Star rating) are described.
Chapter 13, “Improving Performance and Controlling the Critical Cycle,” discusses ideas
for topics for studies that reflect current issues such as comparative effectiveness evaluation,
outcome measurement, Recovery Audit Contractor audits and payment error reviews,
American Health Information Management Association (AHIMA) governance principles,
issues specific to critical access/rural facilities (e.g., use of and reimbursement for telehealth,
swing bed usage, pattern of transfer to regional tertiary centers), no-show and cancelled
appointment patterns, and cultural and linguistic services. Seven categories of performance
improvement studies are also described. In addition, selected strategies of improvement
processes are noted, including rapid cycle improvement, waterfall/cascading impact reviews,
and root cause analysis. An application of dashboard reporting is given, reflecting its use in a
disaster situation. Three examples are given to reflect the unanticipated consequence of
planning: when an improvement fails and negative outcomes occur.
Chapter 14, “Human Resources Management: A Line Manager’s Perspective,” formerly
Chapter 13, is essentially unchanged from the previous edition, although laws applicable to
employment are reviewed for updates.
Chapter 15, “Day-to-Day Management for the Health Professional-as-Manager,” has been
slightly expanded to address the development and management of one’s own career.
 CHAPTER 1

The Dynamic Environment of Health Care

CHAPTER OBJECTIVES
• Describe the healthcare environment as it has evolved since the middle to late 1960s
with attention to the dynamic interplay of key factors.
• Examine megatrends in the healthcare environment with attention to:
○ Client characteristics
○ Professional practitioners and caregivers
○ Healthcare marketplace and settings
○ Applicable laws, regulations, and standards
○ Impact of technology
○ Privacy and security considerations
○ Financing of health care
○ Social and cultural factors
• Identify the role set of the healthcare practitioner as manager.
• Review the classic functions of the manager.
• Define and differentiate between management as an art and a science.
• Conceptualize the characteristics of an effective manager.

THE DYNAMIC ENVIRONMENT OF HEALTH CARE

The contemporary healthcare environment is a dynamic one, combining enduring patterns of
practice with evolving ones to meet challenges and opportunities of changing times. The
healthcare organization is a highly visible one in most communities. It is a fixture with deep
roots in the social, religious, fraternal, and civic fabric of the society. It is a major economic
force, accounting for approximately one-sixth of the national economy. In some local
settings, the healthcare organization is one of the major employers, with the local economy
tied to this sector. The image of the hospital is anchored in personal lives: it is the place of
major life events, including birth and death, and episodes of care throughout one’s life.
Families recount the stories of “remember the time when we all rushed to the hospital ...” and
similar recollections. The hospital is anchored in the popular culture as a common frame of
reference. People express, in ordinary terms, their stereotypic reference to the healthcare
setting: “He works up at the hospital,” “Oh yes, we made another trip to the emergency
room,” or “I have a doctor’s appointment.” Popular media also uses similar references;
television shows regularly feature dramatic scenes in the acute care hospital, with the
physician as an almost universally visible presence. Care is often depicted as happening in
the emergency department.
On closer examination, one recognizes that, in fact, many changes have occurred in the
healthcare environment. The traditional hospital remains an important hub of care but with
many levels of care and physical locations. The physician continues to hold a major place on
the healthcare team, but there has been a steady increase in the development and use of other
practitioners (e.g., nurse midwife, physical therapist as independent agent, physician
assistant) to complement and augment the physician’s role. A casual conversation reflects
such change; a person is just as likely to go to the mall to get a brief physical examination at
a walk-in, franchised clinic as he or she would be to go to the traditional physician’s office.
One might get an annual “flu” shot at the grocery store or smoking cessation counseling from
the pharmacist at a commercial drug store. One might have an appointment for care with a
nurse practitioner instead of a physician. Instead of using an emergency service at a hospital,
one might receive health care at an urgent care service or clinic.
Although the setting and practitioners have developed and changed, the underlying theme
remains: how to provide health care that is the best, most effective, accessible, and
affordable, in a stable yet flexible delivery system. This is the enduring goal.
Those who manage healthcare organizations monitor trends and issues associated with the
healthcare delivery system in order to reach this goal. Thus, a manager seeks to have
thorough awareness and knowledge of the interplay of the dynamic forces. It is useful,
therefore, to follow a systematic approach to identify, monitor, and respond to changes in the
healthcare environment. The following template provides such a systematic approach. The
starting point is the client/patient/recipient of care. This is followed in turn by considerations
of the professional practitioners and caregivers; healthcare market place and settings;
applicable laws, regulations, and standards; impact of technology; privacy and security
considerations; financing; and social-cultural factors.

CLIENT/PATIENT CHARACTERISTICS
The demographic patterns of the overall population have a direct impact on the healthcare
organization. For example, the increase in the number of older people requires more facilities
and personnel specializing in care of this group, such as continuing care, skilled nursing care,
and home care. Clinical conditions associated with aging also lead to the development of
specialty programs such as Alzheimer’s disease and memory care, cardiac and stroke
rehabilitation, and wellness programs to promote healthy aging. At the other end of the age
spectrum, attention to neonatal care, healthy growth and development, and preventive care
are points of focus. Particular attention is given to adolescents and young adults who engage
in contact sports, where concussion, permanent brain injury, fractures, and sprains are
common. In all age groups, there is a rising rate of obesity; type 2 diabetes; and addictions to
substances, such as heroin, opioids, methadone, and assorted “street drugs.”
Diseases and illnesses are, of course, an ever-present consideration. Some diseases seem
to have been conquered and eliminated through timely intervention. Some recur after long
periods of absence. Tuberculosis, polio, smallpox, and pertussis are examples of successes in
disease management and prevention. Sometimes, however, new strains may develop or
compliance with immunization mandates may decrease so that these types of communicable
diseases reappear.
Decades of use of antibacterial medicines has given rise to superbugs, resistant to the
usual treatment. Another element of concern is the appearance of an almost unknown disease
entity (e.g., Ebola or a pandemic agent). New clinical conditions may also arise within
certain age groups, necessitating fresh approaches to their care. By way of example, consider
the rise in autism and childhood obesity.
Other characteristics of the client/patient population reflect patterns of usage and the
associated costs of care. The identification of superusers—patients who have high
readmission rates and/or longer than average lengths of stay or more complications—gives
providers an insight into practices needing improvement (e.g., better discharge planning or
increased patient education). The geographic region that constitutes the general catchment
area of the facility should be analyzed to identify health conditions common to the area.
Examples include rural farm regions, with associated injuries and illnesses; heavy industry,
with work-related injuries; and winter resort areas, with injuries resulting from strenuous
outdoor activity (e.g., fractures from skiing injuries).

TRENDS RELATING TO PRACTITIONERS AND

CAREGIVERS
The trends and issues relating to practitioners and caregivers cluster around the continuing
expansion of scope of practice, with the related increase in education and credentialing. The
traditional attending physician role has given way to the inpatient physician, the hospitalist.
The one-to-one physician–patient role set continues to shift from solo practice to group
practice and team coverage. Licensed, credentialed nonphysician practitioners continue to
augment the care provided by the physician. These physician-extenders often specialize—for
example, the physical therapist in sports-related care, the occupational therapist in autism
programs, the nurse practitioner in wellness care for the frail elderly, the nurse midwife, the
nurse case manager in transition care, and the physician assistant in emergency care.
Educational requirements include advanced degrees in the designated field.
There is a related shift in the practice settings for these various practitioners. The move
away from inpatient-based care leads to an increase in independent practice. Sometimes the
franchise model is favored over self-employment. Regional and national franchises provide a
turnkey practice environment with the additional benefits of a management support division.

The Family as Caregiver

Although the provision of care by family members is a practice that long predates formal
healthcare models, these caregivers are the focus of renewed attention. As shorter stays for
inpatient care, or subacute care to reduce inpatient care, become the norm, the role of the
family caretaker intensifies. The patient care plan, with emphasis on the discharge plan,
necessarily includes instruction to family members about such elements as medication
regimen, wound care, infection prevention, and injection processes. If the patient does not
have a family member who is able to assist in these ways, or if the patient (often a frail,
elderly person) lives alone, coordination of services with a community agency or commercial
company is needed. This gives rise to related issues. Can family members be reimbursed by
insurance providers? If so, what is needed by way of documentation and billing? And there is
yet another related issue: how can employers assist workers to meet the demands of work as
well as help the family member? Practices such as flexible work hours and unpaid leave
become both desirable and necessary elements.

Changes in Management Support Services

Behind the scenes, there is the wide network of management support services within the
healthcare organization. The trend toward specialization increases within these ranks, with
new job categories being developed in response to related trends. With regard to finances and
reimbursement, chief financial officers (or similar administrators) augment their teams with
clinical reimbursement auditors, coding and billing compliance officers, physician coder-
educators, and certified medical coders. The regulatory standards manager specializes in
coordinating the many compliance factors flowing from laws, regulations, and standards. The
chief information officer augments that role with specialized teams, including nurse
informaticians, clinical information specialists, and information technology experts.

Patterns of Care
Improvements in patient care services, the utilization of advanced technologies such as
telemedicine, and the financial pressures to reduce the length of stay for inpatient care have
resulted in shorter stays, more transitional care, and (possibly) a higher readmission rate. To
offset a high readmission rate, additional attention is given to the discharge plan. The
increased use of the observation unit in the emergency department also helps reduce
admission and readmission rate. These issues and trends lead to a discussion of the healthcare
setting.

THE HEALTHCARE SETTING: FORMAL

ORGANIZATIONAL PATTERNS AND LEVELS OF CARE
Each healthcare setting has a distinct pattern of organization and offers specific levels of
care. Characteristics include ownership and sponsorship, nonprofit or for-profit corporate
status, and distinct levels of care. These elements are specified in the license to operate as
well as in the corporate charter. Ownership and sponsorship often reflect deep ties to the
immediate community. A sector of the community, such as a fraternal organization, a
religious association, or an academic institution, developed and funded the original hospital
or clinic, almost always as nonprofit because of their own nonprofit status. These
organizations purchased the land, had the buildings erected and equipped, and provided
continued supplemental funding for the enterprise. Federal, state, city, and county units of
government also own and sponsor certain facilities (e.g., facilities for veterans, state
behavioral care facilities, county residential programs for the intellectually disabled). For-
profit ownership and sponsorship include owner-investor hospital and clinic chains; long-
term care facilities; franchise operations for specialty care (e.g., eye care, rehabilitation
centers, retail clinics in drugstores and big-box retailer stores). Over the past several decades,
sponsorship by religious or fraternal organizations has diminished, with the resulting sale of
these healthcare facilities to other entities. The original name is often retained because it is a
familiar and respected designation in the community.

Provider Growth: Mergers, Joint Ventures, and Collaborative

Partnerships
Healthcare organizations periodically change or augment their service offerings, with a
resulting change in corporate structure. This restructuring may take the form of a merger, a
joint venture, or a collaborative partnership. Why do healthcare organizations seek
restructuring? The reasons are several:
• The desire to express an overall value of promoting comprehensive, readily accessible
care by shoring up smaller community-based facilities, keeping them from closure
• The need for improved efficiencies resulting from centralized administrative practices
such as financial and health information resource streamlining or public relations and
marketing intensification
• The desire and/or need to penetrate new markets to attract additional clients
• The desire and/or need to increase size so as to have greater clout in negotiations with
managed care providers who tend to bypass smaller entities
As cost-containment pressure began to grow, providers—primarily hospitals—initially
moved into mergers mostly to secure economies of scale and other operating efficiencies and
sometimes for reasons as basic as survival. The growth and expansion of managed care plans
provided further incentive to merge among hospitals, which seems to have inspired health
plan mergers in return. Each time a significant merger occurs, one side gains more leverage
in negotiating contracts. The larger the managed care plan, the greater the clout in negotiating
with hospitals and physicians and vice versa.

Clarification of Terms
The term merger is used to describe the blending of two or more corporate entities to create
one new organization with one licensure and one provider number for reimbursement
purposes. One central board of trustees or directors is created, usually with representation
from each of the merged facilities. Debts and assets are combined. For example, suppose a
university medical center buys a smaller community-based hospital. Ownership and control
is now shifted to the new organization. Sometimes the names of the original facilities are
retained as part of public relations and marketing, as when a community group or religious-
affiliated group has great loyalty and ties to the organization. Alternatively, a combined name
is used, such as Mayfair Hospital of the University Medical System.
The joint venture differs from a merger in that each organization retains its own standing
as a specific legal/corporate entity. A joint venture or affiliation is a formal agreement
between or among member facilities to officially coordinate and share one or more activities.
Ownership and control of each party remains distinct, but binding agreements, beneficial to
all parties, are developed. Shared activities typically include managed care negotiations,
group purchasing discounts, staff development and education offerings, and shared
management services. Each organization keeps its own name with the addition of some
reference to its affiliated status, as in the title: Port Martin Hospital, an affiliate of Vincent
Medical Center.
A collaborative partnership is another interorganizational arrangement. As with the joint
venture, each organization retains its own standing as a specific legal–corporate entity. The
purpose of the collaborative partnership is to draw on the mutually beneficial resources of
each party for a specific time period associated with the completion of agreed-on projects. An
example from research illustrates this point: a university’s neuroscience and psychology
departments and a hospital pediatric service combine research efforts in the area of autism. A
formal letter of agreement or mutual understanding is exchanged, outlining the essential
aspects of the cooperative arrangement.
Such restructuring efforts, especially the formal merger, are preceded by mutual due
diligence reviews in which operational, financial, and legal issues are assessed. Federal
regulations and state licensing requirements must be followed. Details of the impact of the
restructuring on operational levels are considered, with each manager providing reports;
statistics; contractual information, leases (as of equipment); and staffing arrangements,
including independent contractors and outsourced work.
In the instance of a full merger, practical considerations constitute major points of focus.
Examples include redesigning forms, merging the master patient index and record system
into one new system, merging finance and billing processes, and officially discharging and
readmitting patients when the legally binding merger has taken place.
Present-day mergers and joint ventures can have a pronounced effect on the health
professional entering a management position. Consider the example of a laboratory manager
who must now oversee a geographically divided service because a two-hospital merger
results in this person’s having responsibility in two sites that are miles apart. There is far
more to consider in managing a split department than in managing a single-site operation.
The manager’s job is made all the more difficult. Overall, however, mergers, joint ventures,
and collaborative partnerships are an opportunity for the professional-as-manager with
greatly increased responsibility and accountability and a role of increasing complexity.

Range of Service and Levels of Care

One of the most distinguishing features of a specific healthcare organization is the range of
service, along with levels of care. This feature identifies the organization as a particular kind
of organization, explicitly defined in its license to operate (e.g., an acute care hospital, an
adult day care center, a hospice). An organization may offer many different services, both
inpatient and outpatient. The range of service and levels of care are part of the overall
definition of the organization; the specific types of care are delineated. Groups such as the
American Hospital Association (AHA), The Joint Commission (TJC) and similar
associations, and various designated federal and/or state agencies, define types and levels of
care. Thus, a hospital might develop its range of services at an advanced level, with a variety
of specialty services, to meet the definition of tertiary care. A small, rural hospital might seek
to meet the basic standards for a critical access facility, capitalizing on the flexibility such
designation permits.
Clinics vary in their range of service from the relatively small, walk-in clinic, to more
complex services such as an urgent care clinic or specialty clinic associated with a hospital.
In this latter arrangement, the inpatient service coordinates care with its companion
outpatient clinic. Examples include surgery, cardiac care, and prenatal and postnatal care.
Another way of noting the variety of care services is to group organizations by client
characteristics and treatment needs: geriatric behavioral care, rapid treatment for drug-
dependent clients, women’s health, comprehensive cancer care, sports medicine, hospice
care, and intensive day treatment for at-risk youth. Care of frail, elderly people has been and
is a growth industry because of the simple fact of demographics—the increasing numbers of
older individuals. The variety of levels of care include independent living units; personal care
assistance, including secured units for dementia care; skilled nursing care; and
comprehensive continuing care facilities. Adult day care programs augment residential care.
Further details about the range of care can be found by identifying the organization’s place
in the overall continuum of care. For the purposes of this discussion, the acute care, inpatient
facility will be placed at the center, with the continuum of care segmented as subacute and
postacute, although it should be noted that not all care involves inpatient admission. Thus, an
organization might tailor its services to support transitional care, either temporary or
permanent care, with a postacute rehabilitation center, a long-term nursing care center, and
assisted living and secured personal care for frail elderly people. The current emphasis on
reducing readmission rates for inpatient care gives new impetus to the development and/or
expansion of these types of services. A traditional nursing home, specializing in “balance of
life” care of frail, elderly people, might restructure its programs to add posthospitalization
care, with the expectation that the length of stay will be weeks or (a few) months—not
indeterminate and permanent. Home care programs have increased in prominence because of
their place in the sequence of care. Shortened inpatient stays, outpatient same-day surgery,
transitional care from hospital to nursing home to the patient’s personal residence intensify
the need for home care by nurses, along with a variety of other caregivers (e.g., health aides,
homemaker aides).
Hospice care represents a model of service that utilizes several levels of care. Care of the
terminally ill (regardless of age) is rendered in the home, in the hospital when needed, and in
a nursing care facility. A hospice might be owned and sponsored by an inpatient facility or
operate as a stand-alone organization. One way to describe hospice care is this: the hospice
program follows the patient and family as they move through the various changes in location.
In the continuing search for the best care, with flexibility and affordability, there has been
renewed interest in domiciliary care for the elderly or developmentally disabled. The
underlying idea is a return to home-like, individual care provided by paid caregivers, often in
a patient’s own homes. Some states have active programs to increase the number and quality
of such arrangements, along with active plans to decrease the number of nursing home beds.
The group home for adolescents or developmentally disabled people continues to be an
area of change. The movement is away from large, institutional-based care to very small
units (e.g., four to six clients in a family-like group home).

LAWS, REGULATIONS, AND ACCREDITING

STANDARDS
Laws, regulations, and accrediting standards are a major consideration in the delivery of
health care. They affect every aspect of the healthcare system. The sheer volume of such
requirements, some of which are in contradiction to others, has increased to the point that
most organizations have a formally designated compliance officer. This high-level manager,
assigned to the chief executive division, has the responsibility of assessing compliance with
current requirements, monitoring proposed changes, and helping departments and services
prepare for upcoming changes. Other responsibilities of this officer include the preparation of
required reports and studies, the coordination of site visits, and the preparation of any follow-
up action or plan of correction. In addition, this officer provides liaison with the Board of
Trustee’s corporate compliance committee. Managers at the operational level work closely
with this office in order to comply—indeed excel—at meeting all requirements.
The operational level managers, while assisted by the compliance office, must take the
initiative on their own to ensure that day-to-day practices and systems are in order. A
systematic review of laws, regulations, and standards facilitates this practice. A manager can
sort through the thicket of requirements by analyzing them in terms of several features:
• Setting. Licensure laws at the state level authorize the owner/sponsors to offer specific
types of care (e.g., acute care hospital, behavioral care facility, rehabilitation center).
The definitions and requirements in this fundamental law are the starting point, for
without meeting this set of binding elements, the organization would not be permitted to
function. Changes in program offerings, including expansion, termination, or sale,
trigger an update in licensure status.
• Patient/client group. Certain issues concerning definition of the patient/client must be
considered: when does the relationship begin; who is eligible for certain programs of
 care; what aspects of reimbursement for care apply; who may consent for care; and
what, if any, special provisions attach to certain patient groups (e.g., any patients
needing protective care).
• Professional practitioners and the support staff. Professional practitioners are required to
have a license to practice. Both the individual and the organization’s officials must be
mindful of the necessity of meeting this set of rules. In addition to this requirement,
there are many laws and regulations governing working conditions, hours and rates of
pay, and nondiscrimination.
• Systems requirements. Specific aspects of the administrative and support systems are
often laid out in detail, including time frames; requirements for record development and
retention; and review processes relating to patient care, safety, and privacy. Required
documentation of care is delineated in terms of content and time (e.g., development of
plan of care, discharge plan, medication profile, restraint usage).
The sources of law are both state and federal governments. In addition to these, local units
of government, such as counties and cities, have laws that apply to most or all formal
organizations in their geographic jurisdiction. The usual ones are fire and safety codes,
zoning regulations, environmental requirements, and traffic controls.

Regulations Stemming from Laws

The usual practice in lawmaking is this: the basic law is developed and passed, with the
lawmakers recognizing that further details will be needed. The specific law usually indicates
which government department or agency is invested with this rule making power. Healthcare
providers are most familiar with the Department of Health and Human Services (DHHS) and
its Centers for Medicare and Medicaid Services (CMS—formerly the Health Care Financing
Administration) division that has the authority to develop Medicare rules and regulations.
Other current “headliner” laws and companion regulations include the Health Information
Technology for Economic and Clinical Health Act (HITECH), the Health Insurance
Portability and Accountability Act (HIPAA) of 1996, and the Patient Protection and
Affordable Care Act (PPACA) of 2010.

Accrediting Standards
Although these standards or elements of performance are not required as such, most
healthcare facilities seek to meet them and have official recognition by an appropriate
accrediting agency. Some of the usual nationwide accrediting bodies are TJC, Continuing
Care Accreditation Commission, and the Accrediting Commission for Health Care.
Within the accrediting process for the overall facility, there are additional criteria for
certain programs, with the resulting assurance of quality care. By way of example, TJC has a
gold seal of approval rating for rehabilitation services. It also has disease-specific care
certification.
Professional Association Standards and Guidelines
Professional associations develop standards of practice and related guidelines in their area of
expertise. These guidelines reflect best practices and provide practical methods of developing
and implementing operational level systems. In addition to the practical aspect of meeting
such optional standards, there is prestige value associated with gaining recognition by outside
groups. Receiving magnet designation from the American Nurses’ Credentialing Center
illustrates this dual benefit.

Sources of Information about Requirements

Managers face a challenge in trying to keep up to date regarding the many requirements.
They must take a proactive stand, especially for those aspects relating to their department or
service.
One’s professional association is a reliable source of timely and thorough information.
The umbrella organizations such as the AHA monitor current and prospective issues and
make the information readily available. A useful practice for managers to adopt is the regular
monitoring of the Federal Register for federal regulations, and the companion publication at
state level. These agencies publish agenda listings on a periodic basis (e.g., annually,
semiannually) to alert the public about probable new regulations. This is augmented by an
official Notice of Proposed Rulemaking about a specific topic.
Government agencies, public and private “think tanks,” and other associations prepare
position papers; national, state, or regional health initiatives proposals; and similar plans.
Healthy People 2020 or the DHHS’s national health goals or a state governor’s long-range
plan are examples of readily available documents to alert managers of trends and issues.

THE IMPACT OF TECHNOLOGY

A survey of any health discipline would readily provide examples of the impact of
technology. New treatment modalities emerge. For example, specialty care is taken to the
patient (e.g., bedside anesthesia, mobile vans with chemotherapy, portable diagnostic
equipment). There is rapid and constant adoption of computerized devices. Several areas of
interest are highlighted here to illustrate the trends and issues of a high-tech world and its
implications for healthcare delivery.

eHealth and Virtual Health

This segment of health care has several names: eHealth, Virtual Health, and Digital
Connectivity. The eVisit, wherein patient and provider communicate by means of
technological interaction instead of face-to-face, in an office, has become commonplace.
Telemedicine or telehealth is a broader and slightly older term, reflecting the same kind of
interaction. Both methods utilize video conferencing, telephone systems, and computers. The
eVisit by the patient with the clinician is a particularly good method for patients who are in
rural areas without easy access to their primary care provider; it is useful in the same way for
the homebound patient without transportation or whose chronic illness is exacerbated by
going outside the home. Virtual counseling is another example of this kind of care; the
sufferer of posttraumatic stress disorder or depression might find easier access to
interventions and care because it is readily available through technology. Also, the eVisit is a
useful alternative when inclement weather makes travel to on-site care unwise or impossible.
In addition, remote monitoring provides real-time feedback to providers and patients,
allowing them to make more timely interventions when indicated. Common applications
include monitoring heart-related conditions, diabetes, and pulmonary hypertension.
Teleconferencing provides clinicians with ready access to specialists in another setting,
thus providing the patient and care team with expert advice and avoiding the transfer of the
patient. The telestroke program exemplifies this type of interaction where time is of the
essence. The popular use of apps for self-monitoring, both for a clinical condition as well as
wellness, provides clients and caregivers with some baseline information about a client’s
ongoing condition. The user can set up reminders about medication use, blood sugar levels,
or blood pressure monitoring. Diet and exercise information can be tracked. Coupled with
popular web searches for health information (e.g., getting a “second opinion” from a Web
site), the consumer of health care generates his or her own personal health record.

The Personal Health Record

This is not a new concept. Conscientious individuals routinely keep important health
documents, including immunization records, summaries of episodes of care, and their own
tracking notes about a chronic condition. What is new is the increased computerization of
such notes. With the emphasis on developing and maintaining an electronic health record
system, healthcare organizations encourage the incorporation of client-generated portfolios
and the official documentation from healthcare providers into a comprehensive document.
Patients’ rights to access and receive a copy of their health records has been well established
and is encouraged. This is a gradual change from the days when there was limited or no
routine access. The personal health record (PHR) does not replace the legal record of the
healthcare provider—the PHR is developed and maintained by the patient/client and the
official record by the provider. There is a related trend: having the patient access the ongoing,
official record through electronic systems. Providers make this possible through the
development of secure portal access to the information and encourage its use through patient
education about the process. Information includes access to test results, discharge
instructions, procedure information, and similar data. The goal is to increase patients’
involvement in their own care. The electronic health record is more fully discussed in the
chapter on the challenges of change in the healthcare system.

Data Warehousing and Data Mining

As the electronic data capture and retention and manipulation increases, so does the sheer
volume of data. These electronic measures incorporate and enhance the more historical
methods of the hard copy record, decentralized indexes and registries, and special studies.
Data warehousing refers to the centralized depository of data collected from most or all
aspects of the organization (e.g., patient demographics, financial/billing transactions, clinical
decision making) gathered into one consistent computerized format. Easy connectivity to
national and international data bases (e.g., National Library of Medicine, Medicare Providers
Analysis and Review) is yet another feature of this process. Data mining is the analysis and
extraction of data to find meaningful facts and trends for real-time interventions in clinical
decision-making support, studies and oversight review of administrative and clinical practice
by designated review groups, budget support, and related data usage. Trend analysis and
predictive indicators (e.g., injury prediction outcomes in pediatric emergencies or predictions
of impending arrhythmia and sudden death, mortality predictions) are readily available to
clinicians. Data mining is also a business; a medical center, with its fast compilation of core
data and specialty data elements, may sell nonidentifiable patient data to pharmaceutical,
medical device, and biotech industries.

Translational Medicine
With the ready availability of support data, clinicians seek to more effectively and rapidly
complete the cycle of bench to bedside to bench. Translational medicine emerges as an area
of intensified interest, with hospitals coordinating these efforts through a clinical innovation
office headed by a physician with an appropriate support staff. This strengthens both research
capabilities and clinical practice.

The Health Information Exchange

The electronic health record enhances patient care within the organization because of its real-
time, comprehensive features. But what of the situations in which care is given in more than
one setting? The release of information process, using traditional hard copy or even
electronic transmission, usually starts after the patient is admitted. Why not develop systems
of interchange of information, regardless of the point of care? Such a system would facilitate
communication among providers, reduce the number of unneeded tests, and provide a more
comprehensive review of patients’ past and ongoing care. Technology supports this concept;
the electronic movement of health-related information is available. The coordinated efforts to
make this a reality have led to the development of regional health information exchange of
patient-consented information.

Privacy and Security Issues

The positive aspects of technology as applied to health care are clear. But along with these
positive benefits, there arise new concerns for privacy and security issues. Hackers can
access and even destroy computerized data bases. Identify theft, including medical identity, is
an increasing problem for individuals and organizations. Consequently, safeguards are
increased to secure the data, yet keep it easily accessible by legitimate users. There is a
growing body of laws and regulations relating to these issues, foremost of which is HIPAA,
mandating a variety of controls and practices to ensure patient privacy is protected. A more
detailed discussion of this law and its requirements is in the chapter on the challenge of
change.

Informatics Standards and Common Language

The goals of data sharing in support of patient care are generally well accepted, with active
implementation of systems. To make this effective, there is the continuing need for
interoperability of systems along with informatics standards and common language. These
efforts include the development of standard vocabulary and classification systems, such as
the National Library of Medicine’s Unified Medical Language System as well as the
standards developed by the Institute of Electrical and Electronic Engineers and the Health
Level-7 standards. HIPAA regulations requires uniform protocols for electronic transactions
for both format and content of data capture and transmission. The development of a national
healthcare information infrastructure has the support of key advocates who support the
development and implementation of national standards.

The Virtual Enterprise

The concept of the virtual enterprise has emerged as a result of available technology in both
the for-profit and nonprofit sectors. Organizations develop contractual partnerships with
independent companies and individuals who provide goods and services. Instead of on-site
departments, services, or units, or direct employer–employee relationships, organizations
outsource many functions. By way of example, consider the contemporary health information
department that has outsourced several functions: transcription, billing and coding support,
release of information, and document storage and retrieval. Another example, drawn from a
direct patient care program, is reflected in a chronic disease management service within a
home health agency. The home health agency coordinates services from other health
providers who remain independent agents. This trend is so common that, in job descriptions
and want ads, the job location is noted as to on-site or virtual as the setting.

REIMBURSEMENT AND PATTERNS OF PAYMENT

Patterns of payment for health care have changed in response to social, political, and
economic pressures. Hospitals and clinics have deep historical roots in charitable, not-for-
profit models; along with this early approach to care there was also the fee-for-service
approach as patients made payments directly to practitioners.
Health insurance programs, both nonprofit such as Blue Cross and Blue Shield and
commercial insurance plans, emerged in the 1930s as partners in the payment for healthcare
services. The form of insurance that many of these early plans offered was frequently
referred to as “hospitalization” insurance; it covered costs when one was hospitalized, but the
majority of early plans did not cover common ancillary services such as visits to physicians.
The 1960s saw the introduction of federally funded care with the creation of Medicare
coverage for the elderly and Medicaid, essentially a welfare program, to provide coverage for
low-income persons and the indigent. Medicare and Medicaid were established by the same
federal legislation but they differ as sources of payment. Medicare reimbursement is fully
federal, but Medicaid reimbursement is shared, with 50% coming from the federal
government and the remaining 50% split between state and county. In some instances, the
second 50% is split evenly between state and county and in some the split is different (e.g.,
34% state and 16% county).
Concern for healthcare costs has been gathering momentum since the 1960s, as have
efforts to control or reduce these costs. Costs clearly took a leap upward immediately
following the introduction of Medicare and Medicaid; however, Medicare and Medicaid are
not the sole cause of the cost escalation. Rather, costs have been driven up by a complex
combination of forces that include the aforementioned programs and other government
undertakings, private not-for-profit and commercial insurers, changes in medical practice and
advancements in technology, proliferation of medical specialties, increases in physician fees,
advances in pharmaceuticals, overexpansion of the country’s hospital system, economic
improvements in the lot of healthcare workers, and the desires and demands of the public.
These and other forces have kept healthcare costs rising at a rate that has outpaced overall
inflation two- or threefold in some years.
As concern for healthcare costs has spread, so have attempts to control costs without
adversely affecting quality or hindering access. The final two decades of the 1900s and the
beginning of this century have seen some significant dollar-driven phenomena that are
dramatically changing the face of healthcare delivery. Specifically, these include the
following:
• The rise of competition among providers in an industry that was long considered
essentially devoid of competition
• Changes in the structure of care delivery, such as system shrinkage as hospitals decertify
beds; an increase in hospital closures, mergers, and other affiliations that catalyzed the
growth of healthcare systems; and the proliferation of independent specialty practices
• The advent and growth and expansion of managed care
In one way or another, most modern societal concerns for health care relate directly to cost
or, in some instances, to issues of access to health care, which in turn translate directly into
concern for cost. Massive change in health care has become a way of life, and dollars are the
principal driver of this change.

THE MANAGED CARE ERA

The Managed Care “Solution” and the Beginning of Restricted
Access
Aside from technological advances, most of what has occurred in recent years in the
organization of healthcare delivery, and payment has been driven by concern for costs.
Changes have been driven by the desire to stem alarming cost increases and, in some
instances, to reduce costs overall. These efforts have been variously focused. Government
and insurers have acted on the healthcare money supply, essentially forcing providers to find
ways of operating on less money than they think they require. Provider organizations have
taken steps to adjust expenditures to fall within the financial limitations they face. These
steps have included closures, downsizing, formation of systems to take advantage of
economies of scale, and otherwise seeking ways of delivering care more economically and
efficiently. In this cost-conscious environment, managed care evolved.
Managed care, consisting of a number of practices intended to reduce costs and improve
quality, seemed, at least in concept, to offer workable solutions to the problem of providing
reasonable access to quality care at an affordable cost. Managed care included economic
incentives for physicians and patients, programs for reviewing the medical necessity of
specific services, increased beneficiary cost-sharing, controls on hospital inpatient
admissions and lengths of stay, cost-sharing incentives for outpatient surgery, selective
contracting with providers, and management of high-cost cases.
The most commonly encountered form of managed care is the health maintenance
organization (HMO). The HMO concept was initially proposed in the 1960s when healthcare
costs began to increase all out of proportion to other costs and so-called “normal” inflation
following the introduction of Medicare and Medicaid. The HMO was formally promoted as a
remedy for rising healthcare costs by the Health Maintenance Organization Act of 1973. The
full title of this legislation is “An Act to amend the Public Health Service Act to provide
assistance and encouragement for the establishment and expansion of health maintenance
organizations, and for other purposes.” From today’s perspective it is interesting to note that
in implementing the HMO Act, it was necessary to override laws in place in a number of
states that actually forbade the establishment of such entities.
The HMO Act provided for grants and loans to be used for starting or expanding HMOs.
Preempting state restrictions on the establishment and operation of federally qualified HMOs,
it required employers with 25 or more employees to offer federally certified HMO options if
they already offered traditional health insurance to employees. (It did not require employers
to offer health insurance if they did not already do so.) To become federally certified, an
HMO had to offer a comprehensive package of specific benefits, be available to a broadly
representative population on an equitable basis, be available at the same or lower cost than
traditional insurance coverage, and provide for increased participation by consumers.
Portions of the HMO Act have been amended several times since its initial passage, most
notably by HIPAA.
Specifically, an HMO is a managed care plan that incorporates financing and delivery of a
defined set of healthcare services to persons who are enrolled in a service network.
For the first time in the history of American health care, the introduction of managed care
placed significant restrictions on the use of services. The public was introduced to the
concept of the primary care physician as the “gatekeeper” to control access to specialists and
various other services. Formerly, an insured individual could go to a specialist at will, and
insurance would usually pay for the service. But with the gatekeeper in place, a subscriber’s
visits to a specialist were covered only if the patient was properly referred by the primary
care physician. Subscribers who went to specialists without referral suddenly found
themselves billed for the entire cost of the specialists.
By placing restrictions on the services that would be paid for and under what
circumstances they could be accessed, managed care plans exerted control over some health
insurance premium costs for employers and subscribers. In return for controlled costs, users
had to accept limitations on their choice of physicians, having to choose from among those
who agreed to participate in a given plan and accept that plan’s payments, accept limitations
on what services would be available to them, and, in most instances, agree to pay specified
deductibles and copayments.
Managed care organizations and governmental payers brought pressure to bear on
hospitals as well. Hospitals and physicians were encouraged to reduce the length of hospital
stays, reduce the use of most ancillary services, and meet more medical needs on an
outpatient basis. Review processes were established, and hospitals were penalized financially
if their costs were determined to be “too high” or their inpatient stays “too long.” Eventually,
payment became linked to a standard or target length of stay so that a given diagnosis was
compensated at a predetermined amount regardless of how long the patient was hospitalized.
As managed care organizations grew larger and stronger, they began to negotiate with
hospitals concerning the use of their services. Various plans negotiated contracts with
hospitals that would provide the best price breaks for the plan’s patients, and price
competition between and among providers became a reality.
By the end of the 1900s, approximately 160 million Americans were enrolled in managed
care plans, encompassing what many thought to be the majority of people who were suitable
for managed care. In-and-out participation of some groups, such as the younger aging
(people in their 60s or so) and Medicaid patients, was anticipated. However, the bulk of
people on whom managed care plans could best make their money were supposedly already
enrolled. But managed care continued to grow in a manner essentially consistent with the
growth of the population overall. According to the trade association America’s Health
Insurance Plans, approximately 90% of insured Americans were enrolled in plans with some
form of managed care by 2007,1 and total participation today continues at or near this 90%
level.
Much of the movement into managed care was driven by corporate employers attempting
to contain healthcare benefit costs. However, during this same period of growing managed
care enrollment, the number of managed care plans experiencing financial problems also
increased steadily.
It appears that managed care was able to slow the rate of health insurance premium
increases throughout most of the 1990s. However, early in the first decade of the 2000s, the
cost of insurance coverage again began climbing at an alarming rate. The increase continued;
it was reported in 2005 that health insurance premiums would increase in some areas by
more than 12% for 2006, making 2006 the fifth straight year of double-digit premium
increases for many.2 This grim prediction for 2006 was fulfilled, and the trend has continued,
with increases for most years since then averaging in excess of 10%.
By the end of the 1990s, it appeared that the majority of average middle-class subscribers
had reached a negative consensus about managed care. This caused some damage to the
political viability of for-profit managed care, and it hurt managed care overall. Indeed, it
seemed increasingly likely that managed care might not be financially affordable in the long
run.
The year 2000 was especially grim for the relationship between managed care plans and
Medicare. As a result of decisions made during that year, nearly a million beneficiaries from
464 counties in 34 states lost their coverage on January 1, 2001, when 118 HMOs withdrew
from Medicare. In addition, many of the plans that remained in Medicare increased
premiums and reduced benefits in response to what were described as continually rising costs
and the effects of cuts in reimbursement rates. In December 2000, Congress voted to allocate
billions of additional dollars to Medicare HMOs, supposedly to reduce premiums or increase
benefits to subscribers. However, wording of the legislation also allowed HMOs to pay more
to their networks of hospitals and healthcare professionals, thus consuming the majority of
the additional funds. As a result, only 4 of the 118 HMOs that had withdrawn returned to
Medicare.
Managed care organizations and elements of government brought additional pressure to
bear on hospitals. Hospitals and physicians were encouraged to reduce the length of hospital
stays, cut back on the use of ancillary services, and meet more medical needs on an
outpatient basis. Review processes were established such that hospitals were penalized
financially if their costs were determined to be too high or their inpatient stays too long.
Eventually payment became linked to a standard, or target, length of stay so that any given
diagnosis was compensated at a specific amount regardless of how long the patient was
hospitalized.
As they grew larger, managed care organizations began to deal directly with hospitals,
negotiating the use of their services. As various plans contracted with hospitals that would
give the best price breaks for the plan’s patients, price competition between and among
providers became a factor to be considered.
It is reasonable to say that although managed care provided cost-saving benefits at least
for a time, it is evident that managed care plans have not been able to sustain their promises
of delivering efficient and cost-effective care. An aging population, newer and more
expensive technologies, newer and higher priced prescription drugs, new federal and state
mandates, and pressure from healthcare providers for higher fees have essentially wiped out
the savings from managed care for employers and subscribers alike. It is likely, however, that
without managed care, costs and cost increases would be even more pronounced than at
present. Essentially the managed care model became a permanent and common feature in the
coordination of and payment for care.

The Balanced Budget Act of 1997

The Balanced Budget Act (BBA) of 1997 is worthy of mention in this discussion of managed
care. This act was adopted in part because of: the increased fiscal pressure caused by the
growth of Medicare payments, concern over Medicare overpayments, the desire for more
rational payment methods, and a stated wish to offer beneficiaries greater choice. By
mandating that federal revenues and federal expenditures be balanced each fiscal year, the
BBA fundamentally altered the rules of fiscal policy making in the United States.3 (It perhaps
need not be said that the mandate to balance the federal budget has been dramatically
overridden in many years since then.) A balanced budget would of course be sensible, but it
was the manner in which budget balancing was implemented that forced disproportionate
reductions in healthcare reimbursement. In terms of its overall effects, the BBA became the
most significant piece of healthcare legislation since Medicare and Medicaid were
established in 1965.4
The reductions required to balance the budget were not taken uniformly from all elements
of the budget. More than half of the federal budget—specifically the very large piece of the
budget, including Department of Defense spending, Social Security, and interest on the
federal debt—was insulated from cuts, meaning that the entire balancing reduction would
have to come from the remaining portion (less than half) of the budget. Medicare had some
time earlier become a significantly large third-party payer for healthcare services, so as a
direct result of the BBA, drastic cuts occurred in Medicare reimbursement, therefore
affecting the income of healthcare providers.
Some degree of relief from the BBA arrived in the form of the Balanced Budget
Refinement Act (BBRA) of 1999, arising perhaps out of recognition that the act itself went
too far in reducing reimbursements. When the BBRA became law, it suspended the cap that
had been placed on outpatient rehabilitation services and paved the way for the design of a
new payment mechanism. Regardless of these positive steps, however, the BBA brought
some irreversible consequences to healthcare providers.

WHO IS REALLY PAYING THE BILLS?

Payment for health care flows from a number of sources, some major and well known and
some less recognizable and relatively specialized. A number of these sources can be grouped
together under the heading of “government,” the largest being, of course, Medicare and
Medicaid. Yet in addition to Medicare and Medicaid, there are other government programs
that reimburse for health care at both state and federal levels. There are, for example, specific
programs for providing health services to the dependents and survivors of military personnel
and there is the health care for former military personnel provided by the hospital system of
the Veterans Administration. Also under “government” are a number of state programs
including, for example, Workers’ Ccompensation, which pays for health care for sick or
injured workers as well as compensating for lost income. Many of the states also have unique
programs designed to serve certain specific population segments (e.g., Healthy New York
programs in New York State).
Next, outside of government programs, various programs can be gathered under the
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 DANCE ON STILTS AT THE GIRLS’ UNYAGO, NIUCHI

Newala, too, suffers from the distance of its water-supply—at least

the Newala of to-day does; there was once another Newala in a lovely
valley at the foot of the plateau. I visited it and found scarcely a trace
of houses, only a Christian cemetery, with the graves of several
missionaries and their converts, remaining as a monument of its
former glories. But the surroundings are wonderfully beautiful. A
thick grove of splendid mango-trees closes in the weather-worn
crosses and headstones; behind them, combining the useful and the
agreeable, is a whole plantation of lemon-trees covered with ripe
fruit; not the small African kind, but a much larger and also juicier
imported variety, which drops into the hands of the passing traveller,
without calling for any exertion on his part. Old Newala is now under
the jurisdiction of the native pastor, Daudi, at Chingulungulu, who,
as I am on very friendly terms with him, allows me, as a matter of
course, the use of this lemon-grove during my stay at Newala.
 FEET MUTILATED BY THE RAVAGES OF THE “JIGGER”
(Sarcopsylla penetrans)

The water-supply of New Newala is in the bottom of the valley,

some 1,600 feet lower down. The way is not only long and fatiguing,
but the water, when we get it, is thoroughly bad. We are suffering not
only from this, but from the fact that the arrangements at Newala are
nothing short of luxurious. We have a separate kitchen—a hut built
against the boma palisade on the right of the baraza, the interior of
which is not visible from our usual position. Our two cooks were not
long in finding this out, and they consequently do—or rather neglect
to do—what they please. In any case they do not seem to be very
particular about the boiling of our drinking-water—at least I can
attribute to no other cause certain attacks of a dysenteric nature,
from which both Knudsen and I have suffered for some time. If a
man like Omari has to be left unwatched for a moment, he is capable
of anything. Besides this complaint, we are inconvenienced by the
state of our nails, which have become as hard as glass, and crack on
the slightest provocation, and I have the additional infliction of
pimples all over me. As if all this were not enough, we have also, for
the last week been waging war against the jigger, who has found his
Eldorado in the hot sand of the Makonde plateau. Our men are seen
all day long—whenever their chronic colds and the dysentery likewise
raging among them permit—occupied in removing this scourge of
Africa from their feet and trying to prevent the disastrous
consequences of its presence. It is quite common to see natives of
this place with one or two toes missing; many have lost all their toes,
or even the whole front part of the foot, so that a well-formed leg
ends in a shapeless stump. These ravages are caused by the female of
Sarcopsylla penetrans, which bores its way under the skin and there
develops an egg-sac the size of a pea. In all books on the subject, it is
stated that one’s attention is called to the presence of this parasite by
an intolerable itching. This agrees very well with my experience, so
far as the softer parts of the sole, the spaces between and under the
toes, and the side of the foot are concerned, but if the creature
penetrates through the harder parts of the heel or ball of the foot, it
may escape even the most careful search till it has reached maturity.
Then there is no time to be lost, if the horrible ulceration, of which
we see cases by the dozen every day, is to be prevented. It is much
easier, by the way, to discover the insect on the white skin of a
European than on that of a native, on which the dark speck scarcely
shows. The four or five jiggers which, in spite of the fact that I
constantly wore high laced boots, chose my feet to settle in, were
taken out for me by the all-accomplished Knudsen, after which I
thought it advisable to wash out the cavities with corrosive
sublimate. The natives have a different sort of disinfectant—they fill
the hole with scraped roots. In a tiny Makua village on the slope of
the plateau south of Newala, we saw an old woman who had filled all
the spaces under her toe-nails with powdered roots by way of
prophylactic treatment. What will be the result, if any, who can say?
The rest of the many trifling ills which trouble our existence are
really more comic than serious. In the absence of anything else to
smoke, Knudsen and I at last opened a box of cigars procured from
the Indian store-keeper at Lindi, and tried them, with the most
distressing results. Whether they contain opium or some other
narcotic, neither of us can say, but after the tenth puff we were both
“off,” three-quarters stupefied and unspeakably wretched. Slowly we
recovered—and what happened next? Half-an-hour later we were
once more smoking these poisonous concoctions—so insatiable is the
craving for tobacco in the tropics.
Even my present attacks of fever scarcely deserve to be taken
seriously. I have had no less than three here at Newala, all of which
have run their course in an incredibly short time. In the early
afternoon, I am busy with my old natives, asking questions and
making notes. The strong midday coffee has stimulated my spirits to
an extraordinary degree, the brain is active and vigorous, and work
progresses rapidly, while a pleasant warmth pervades the whole
body. Suddenly this gives place to a violent chill, forcing me to put on
my overcoat, though it is only half-past three and the afternoon sun
is at its hottest. Now the brain no longer works with such acuteness
and logical precision; more especially does it fail me in trying to
establish the syntax of the difficult Makua language on which I have
ventured, as if I had not enough to do without it. Under the
circumstances it seems advisable to take my temperature, and I do
so, to save trouble, without leaving my seat, and while going on with
my work. On examination, I find it to be 101·48°. My tutors are
abruptly dismissed and my bed set up in the baraza; a few minutes
later I am in it and treating myself internally with hot water and
lemon-juice.
Three hours later, the thermometer marks nearly 104°, and I make
them carry me back into the tent, bed and all, as I am now perspiring
heavily, and exposure to the cold wind just beginning to blow might
mean a fatal chill. I lie still for a little while, and then find, to my
great relief, that the temperature is not rising, but rather falling. This
is about 7.30 p.m. At 8 p.m. I find, to my unbounded astonishment,
that it has fallen below 98·6°, and I feel perfectly well. I read for an
hour or two, and could very well enjoy a smoke, if I had the
wherewithal—Indian cigars being out of the question.
Having no medical training, I am at a loss to account for this state
of things. It is impossible that these transitory attacks of high fever
should be malarial; it seems more probable that they are due to a
kind of sunstroke. On consulting my note-book, I become more and
more inclined to think this is the case, for these attacks regularly
follow extreme fatigue and long exposure to strong sunshine. They at
least have the advantage of being only short interruptions to my
work, as on the following morning I am always quite fresh and fit.
My treasure of a cook is suffering from an enormous hydrocele which
makes it difficult for him to get up, and Moritz is obliged to keep in
the dark on account of his inflamed eyes. Knudsen’s cook, a raw boy
from somewhere in the bush, knows still less of cooking than Omari;
consequently Nils Knudsen himself has been promoted to the vacant
post. Finding that we had come to the end of our supplies, he began
by sending to Chingulungulu for the four sucking-pigs which we had
bought from Matola and temporarily left in his charge; and when
they came up, neatly packed in a large crate, he callously slaughtered
the biggest of them. The first joint we were thoughtless enough to
entrust for roasting to Knudsen’s mshenzi cook, and it was
consequently uneatable; but we made the rest of the animal into a
jelly which we ate with great relish after weeks of underfeeding,
consuming incredible helpings of it at both midday and evening
meals. The only drawback is a certain want of variety in the tinned
vegetables. Dr. Jäger, to whom the Geographical Commission
entrusted the provisioning of the expeditions—mine as well as his
own—because he had more time on his hands than the rest of us,
seems to have laid in a huge stock of Teltow turnips,[46] an article of
food which is all very well for occasional use, but which quickly palls
when set before one every day; and we seem to have no other tins
left. There is no help for it—we must put up with the turnips; but I
am certain that, once I am home again, I shall not touch them for ten
years to come.
Amid all these minor evils, which, after all, go to make up the
genuine flavour of Africa, there is at least one cheering touch:
Knudsen has, with the dexterity of a skilled mechanic, repaired my 9
× 12 cm. camera, at least so far that I can use it with a little care.
How, in the absence of finger-nails, he was able to accomplish such a
ticklish piece of work, having no tool but a clumsy screw-driver for
taking to pieces and putting together again the complicated
mechanism of the instantaneous shutter, is still a mystery to me; but
he did it successfully. The loss of his finger-nails shows him in a light
contrasting curiously enough with the intelligence evinced by the
above operation; though, after all, it is scarcely surprising after his
ten years’ residence in the bush. One day, at Lindi, he had occasion
to wash a dog, which must have been in need of very thorough
cleansing, for the bottle handed to our friend for the purpose had an
extremely strong smell. Having performed his task in the most
conscientious manner, he perceived with some surprise that the dog
did not appear much the better for it, and was further surprised by
finding his own nails ulcerating away in the course of the next few
days. “How was I to know that carbolic acid has to be diluted?” he
mutters indignantly, from time to time, with a troubled gaze at his
mutilated finger-tips.
 Since we came to Newala we have been making excursions in all
directions through the surrounding country, in accordance with old
habit, and also because the akida Sefu did not get together the tribal
elders from whom I wanted information so speedily as he had
promised. There is, however, no harm done, as, even if seen only
from the outside, the country and people are interesting enough.
The Makonde plateau is like a large rectangular table rounded off
at the corners. Measured from the Indian Ocean to Newala, it is
about seventy-five miles long, and between the Rovuma and the
Lukuledi it averages fifty miles in breadth, so that its superficial area
is about two-thirds of that of the kingdom of Saxony. The surface,
however, is not level, but uniformly inclined from its south-western
edge to the ocean. From the upper edge, on which Newala lies, the
eye ranges for many miles east and north-east, without encountering
any obstacle, over the Makonde bush. It is a green sea, from which
here and there thick clouds of smoke rise, to show that it, too, is
inhabited by men who carry on their tillage like so many other
primitive peoples, by cutting down and burning the bush, and
manuring with the ashes. Even in the radiant light of a tropical day
such a fire is a grand sight.
Much less effective is the impression produced just now by the
great western plain as seen from the edge of the plateau. As often as
time permits, I stroll along this edge, sometimes in one direction,
sometimes in another, in the hope of finding the air clear enough to
let me enjoy the view; but I have always been disappointed.
Wherever one looks, clouds of smoke rise from the burning bush,
and the air is full of smoke and vapour. It is a pity, for under more
favourable circumstances the panorama of the whole country up to
the distant Majeje hills must be truly magnificent. It is of little use
taking photographs now, and an outline sketch gives a very poor idea
of the scenery. In one of these excursions I went out of my way to
make a personal attempt on the Makonde bush. The present edge of
the plateau is the result of a far-reaching process of destruction
through erosion and denudation. The Makonde strata are
everywhere cut into by ravines, which, though short, are hundreds of
yards in depth. In consequence of the loose stratification of these
beds, not only are the walls of these ravines nearly vertical, but their
upper end is closed by an equally steep escarpment, so that the
western edge of the Makonde plateau is hemmed in by a series of
deep, basin-like valleys. In order to get from one side of such a ravine
to the other, I cut my way through the bush with a dozen of my men.
It was a very open part, with more grass than scrub, but even so the
short stretch of less than two hundred yards was very hard work; at
the end of it the men’s calicoes were in rags and they themselves
bleeding from hundreds of scratches, while even our strong khaki
suits had not escaped scatheless.

NATIVE PATH THROUGH THE MAKONDE BUSH, NEAR

MAHUTA

I see increasing reason to believe that the view formed some time
back as to the origin of the Makonde bush is the correct one. I have
no doubt that it is not a natural product, but the result of human
occupation. Those parts of the high country where man—as a very
slight amount of practice enables the eye to perceive at once—has not
yet penetrated with axe and hoe, are still occupied by a splendid
timber forest quite able to sustain a comparison with our mixed
forests in Germany. But wherever man has once built his hut or tilled
his field, this horrible bush springs up. Every phase of this process
may be seen in the course of a couple of hours’ walk along the main
road. From the bush to right or left, one hears the sound of the axe—
not from one spot only, but from several directions at once. A few
steps further on, we can see what is taking place. The brush has been
cut down and piled up in heaps to the height of a yard or more,
between which the trunks of the large trees stand up like the last
pillars of a magnificent ruined building. These, too, present a
melancholy spectacle: the destructive Makonde have ringed them—
cut a broad strip of bark all round to ensure their dying off—and also
piled up pyramids of brush round them. Father and son, mother and
son-in-law, are chopping away perseveringly in the background—too
busy, almost, to look round at the white stranger, who usually excites
so much interest. If you pass by the same place a week later, the piles
of brushwood have disappeared and a thick layer of ashes has taken
the place of the green forest. The large trees stretch their
smouldering trunks and branches in dumb accusation to heaven—if
they have not already fallen and been more or less reduced to ashes,
perhaps only showing as a white stripe on the dark ground.
This work of destruction is carried out by the Makonde alike on the
virgin forest and on the bush which has sprung up on sites already
cultivated and deserted. In the second case they are saved the trouble
of burning the large trees, these being entirely absent in the
secondary bush.
After burning this piece of forest ground and loosening it with the
hoe, the native sows his corn and plants his vegetables. All over the
country, he goes in for bed-culture, which requires, and, in fact,
receives, the most careful attention. Weeds are nowhere tolerated in
the south of German East Africa. The crops may fail on the plains,
where droughts are frequent, but never on the plateau with its
abundant rains and heavy dews. Its fortunate inhabitants even have
the satisfaction of seeing the proud Wayao and Wamakua working
for them as labourers, driven by hunger to serve where they were
accustomed to rule.
But the light, sandy soil is soon exhausted, and would yield no
harvest the second year if cultivated twice running. This fact has
been familiar to the native for ages; consequently he provides in
time, and, while his crop is growing, prepares the next plot with axe
and firebrand. Next year he plants this with his various crops and
lets the first piece lie fallow. For a short time it remains waste and
desolate; then nature steps in to repair the destruction wrought by
man; a thousand new growths spring out of the exhausted soil, and
even the old stumps put forth fresh shoots. Next year the new growth
is up to one’s knees, and in a few years more it is that terrible,
impenetrable bush, which maintains its position till the black
occupier of the land has made the round of all the available sites and
come back to his starting point.
The Makonde are, body and soul, so to speak, one with this bush.
According to my Yao informants, indeed, their name means nothing
else but “bush people.” Their own tradition says that they have been
settled up here for a very long time, but to my surprise they laid great
stress on an original immigration. Their old homes were in the
south-east, near Mikindani and the mouth of the Rovuma, whence
their peaceful forefathers were driven by the continual raids of the
Sakalavas from Madagascar and the warlike Shirazis[47] of the coast,
to take refuge on the almost inaccessible plateau. I have studied
African ethnology for twenty years, but the fact that changes of
population in this apparently quiet and peaceable corner of the earth
could have been occasioned by outside enterprises taking place on
the high seas, was completely new to me. It is, no doubt, however,
correct.
The charming tribal legend of the Makonde—besides informing us
of other interesting matters—explains why they have to live in the
thickest of the bush and a long way from the edge of the plateau,
instead of making their permanent homes beside the purling brooks
and springs of the low country.
“The place where the tribe originated is Mahuta, on the southern
side of the plateau towards the Rovuma, where of old time there was
nothing but thick bush. Out of this bush came a man who never
washed himself or shaved his head, and who ate and drank but little.
He went out and made a human figure from the wood of a tree
growing in the open country, which he took home to his abode in the
bush and there set it upright. In the night this image came to life and
was a woman. The man and woman went down together to the
Rovuma to wash themselves. Here the woman gave birth to a still-
born child. They left that place and passed over the high land into the
valley of the Mbemkuru, where the woman had another child, which
was also born dead. Then they returned to the high bush country of
Mahuta, where the third child was born, which lived and grew up. In
course of time, the couple had many more children, and called
themselves Wamatanda. These were the ancestral stock of the
Makonde, also called Wamakonde,[48] i.e., aborigines. Their
forefather, the man from the bush, gave his children the command to
bury their dead upright, in memory of the mother of their race who
was cut out of wood and awoke to life when standing upright. He also
warned them against settling in the valleys and near large streams,
for sickness and death dwelt there. They were to make it a rule to
have their huts at least an hour’s walk from the nearest watering-
place; then their children would thrive and escape illness.”
The explanation of the name Makonde given by my informants is
somewhat different from that contained in the above legend, which I
extract from a little book (small, but packed with information), by
Pater Adams, entitled Lindi und sein Hinterland. Otherwise, my
results agree exactly with the statements of the legend. Washing?
Hapana—there is no such thing. Why should they do so? As it is, the
supply of water scarcely suffices for cooking and drinking; other
people do not wash, so why should the Makonde distinguish himself
by such needless eccentricity? As for shaving the head, the short,
woolly crop scarcely needs it,[49] so the second ancestral precept is
likewise easy enough to follow. Beyond this, however, there is
nothing ridiculous in the ancestor’s advice. I have obtained from
various local artists a fairly large number of figures carved in wood,
ranging from fifteen to twenty-three inches in height, and
representing women belonging to the great group of the Mavia,
Makonde, and Matambwe tribes. The carving is remarkably well
done and renders the female type with great accuracy, especially the
keloid ornamentation, to be described later on. As to the object and
meaning of their works the sculptors either could or (more probably)
would tell me nothing, and I was forced to content myself with the
scanty information vouchsafed by one man, who said that the figures
were merely intended to represent the nembo—the artificial
deformations of pelele, ear-discs, and keloids. The legend recorded
by Pater Adams places these figures in a new light. They must surely
be more than mere dolls; and we may even venture to assume that
they are—though the majority of present-day Makonde are probably
unaware of the fact—representations of the tribal ancestress.
 The references in the legend to the descent from Mahuta to the
Rovuma, and to a journey across the highlands into the Mbekuru
valley, undoubtedly indicate the previous history of the tribe, the
travels of the ancestral pair typifying the migrations of their
descendants. The descent to the neighbouring Rovuma valley, with
its extraordinary fertility and great abundance of game, is intelligible
at a glance—but the crossing of the Lukuledi depression, the ascent
to the Rondo Plateau and the descent to the Mbemkuru, also lie
within the bounds of probability, for all these districts have exactly
the same character as the extreme south. Now, however, comes a
point of especial interest for our bacteriological age. The primitive
Makonde did not enjoy their lives in the marshy river-valleys.
Disease raged among them, and many died. It was only after they
had returned to their original home near Mahuta, that the health
conditions of these people improved. We are very apt to think of the
African as a stupid person whose ignorance of nature is only equalled
by his fear of it, and who looks on all mishaps as caused by evil
spirits and malignant natural powers. It is much more correct to
assume in this case that the people very early learnt to distinguish
districts infested with malaria from those where it is absent.
This knowledge is crystallized in the
ancestral warning against settling in the
valleys and near the great waters, the
dwelling-places of disease and death. At the
same time, for security against the hostile
Mavia south of the Rovuma, it was enacted
that every settlement must be not less than a
certain distance from the southern edge of the
plateau. Such in fact is their mode of life at the
present day. It is not such a bad one, and
certainly they are both safer and more
comfortable than the Makua, the recent
intruders from the south, who have made USUAL METHOD OF
good their footing on the western edge of the CLOSING HUT-DOOR
plateau, extending over a fairly wide belt of
country. Neither Makua nor Makonde show in their dwellings
anything of the size and comeliness of the Yao houses in the plain,
especially at Masasi, Chingulungulu and Zuza’s. Jumbe Chauro, a
Makonde hamlet not far from Newala, on the road to Mahuta, is the
most important settlement of the tribe I have yet seen, and has fairly
spacious huts. But how slovenly is their construction compared with
the palatial residences of the elephant-hunters living in the plain.
The roofs are still more untidy than in the general run of huts during
the dry season, the walls show here and there the scanty beginnings
or the lamentable remains of the mud plastering, and the interior is a
veritable dog-kennel; dirt, dust and disorder everywhere. A few huts
only show any attempt at division into rooms, and this consists
merely of very roughly-made bamboo partitions. In one point alone
have I noticed any indication of progress—in the method of fastening
the door. Houses all over the south are secured in a simple but
ingenious manner. The door consists of a set of stout pieces of wood
or bamboo, tied with bark-string to two cross-pieces, and moving in
two grooves round one of the door-posts, so as to open inwards. If
the owner wishes to leave home, he takes two logs as thick as a man’s
upper arm and about a yard long. One of these is placed obliquely
against the middle of the door from the inside, so as to form an angle
of from 60° to 75° with the ground. He then places the second piece
horizontally across the first, pressing it downward with all his might.
It is kept in place by two strong posts planted in the ground a few
inches inside the door. This fastening is absolutely safe, but of course
cannot be applied to both doors at once, otherwise how could the
owner leave or enter his house? I have not yet succeeded in finding
out how the back door is fastened.

MAKONDE LOCK AND KEY AT JUMBE CHAURO

 This is the general way of closing a house. The Makonde at Jumbe
Chauro, however, have a much more complicated, solid and original
one. Here, too, the door is as already described, except that there is
only one post on the inside, standing by itself about six inches from
one side of the doorway. Opposite this post is a hole in the wall just
large enough to admit a man’s arm. The door is closed inside by a
large wooden bolt passing through a hole in this post and pressing
with its free end against the door. The other end has three holes into
which fit three pegs running in vertical grooves inside the post. The
door is opened with a wooden key about a foot long, somewhat
curved and sloped off at the butt; the other end has three pegs
corresponding to the holes, in the bolt, so that, when it is thrust
through the hole in the wall and inserted into the rectangular
opening in the post, the pegs can be lifted and the bolt drawn out.[50]

MODE OF INSERTING THE KEY

With no small pride first one householder and then a second

showed me on the spot the action of this greatest invention of the
Makonde Highlands. To both with an admiring exclamation of
“Vizuri sana!” (“Very fine!”). I expressed the wish to take back these
marvels with me to Ulaya, to show the Wazungu what clever fellows
the Makonde are. Scarcely five minutes after my return to camp at
Newala, the two men came up sweating under the weight of two
heavy logs which they laid down at my feet, handing over at the same
time the keys of the fallen fortress. Arguing, logically enough, that if
the key was wanted, the lock would be wanted with it, they had taken
their axes and chopped down the posts—as it never occurred to them
to dig them out of the ground and so bring them intact. Thus I have
two badly damaged specimens, and the owners, instead of praise,
come in for a blowing-up.
The Makua huts in the environs of Newala are especially
miserable; their more than slovenly construction reminds one of the
temporary erections of the Makua at Hatia’s, though the people here
have not been concerned in a war. It must therefore be due to
congenital idleness, or else to the absence of a powerful chief. Even
the baraza at Mlipa’s, a short hour’s walk south-east of Newala,
shares in this general neglect. While public buildings in this country
are usually looked after more or less carefully, this is in evident
danger of being blown over by the first strong easterly gale. The only
attractive object in this whole district is the grave of the late chief
Mlipa. I visited it in the morning, while the sun was still trying with
partial success to break through the rolling mists, and the circular
grove of tall euphorbias, which, with a broken pot, is all that marks
the old king’s resting-place, impressed one with a touch of pathos.
Even my very materially-minded carriers seemed to feel something
of the sort, for instead of their usual ribald songs, they chanted
solemnly, as we marched on through the dense green of the Makonde
bush:—
 “We shall arrive with the great master; we stand in a row and have
no fear about getting our food and our money from the Serkali (the
Government). We are not afraid; we are going along with the great
master, the lion; we are going down to the coast and back.”
With regard to the characteristic features of the various tribes here
on the western edge of the plateau, I can arrive at no other
conclusion than the one already come to in the plain, viz., that it is
impossible for anyone but a trained anthropologist to assign any
given individual at once to his proper tribe. In fact, I think that even
an anthropological specialist, after the most careful examination,
might find it a difficult task to decide. The whole congeries of peoples
collected in the region bounded on the west by the great Central
African rift, Tanganyika and Nyasa, and on the east by the Indian
Ocean, are closely related to each other—some of their languages are
only distinguished from one another as dialects of the same speech,
and no doubt all the tribes present the same shape of skull and
structure of skeleton. Thus, surely, there can be no very striking
differences in outward appearance.
 Even did such exist, I should have no time
to concern myself with them, for day after day,
I have to see or hear, as the case may be—in
any case to grasp and record—an
extraordinary number of ethnographic
phenomena. I am almost disposed to think it
fortunate that some departments of inquiry, at
least, are barred by external circumstances.
Chief among these is the subject of iron-
working. We are apt to think of Africa as a
country where iron ore is everywhere, so to
speak, to be picked up by the roadside, and
where it would be quite surprising if the
inhabitants had not learnt to smelt the
material ready to their hand. In fact, the
knowledge of this art ranges all over the
continent, from the Kabyles in the north to the
Kafirs in the south. Here between the Rovuma
and the Lukuledi the conditions are not so
favourable. According to the statements of the
Makonde, neither ironstone nor any other
form of iron ore is known to them. They have
not therefore advanced to the art of smelting
the metal, but have hitherto bought all their
THE ANCESTRESS OF
THE MAKONDE
iron implements from neighbouring tribes.
Even in the plain the inhabitants are not much
better off. Only one man now living is said to
understand the art of smelting iron. This old fundi lives close to
Huwe, that isolated, steep-sided block of granite which rises out of
the green solitude between Masasi and Chingulungulu, and whose
jagged and splintered top meets the traveller’s eye everywhere. While
still at Masasi I wished to see this man at work, but was told that,
frightened by the rising, he had retired across the Rovuma, though
he would soon return. All subsequent inquiries as to whether the
fundi had come back met with the genuine African answer, “Bado”
(“Not yet”).
 BRAZIER

Some consolation was afforded me by a brassfounder, whom I

came across in the bush near Akundonde’s. This man is the favourite
of women, and therefore no doubt of the gods; he welds the glittering
brass rods purchased at the coast into those massive, heavy rings
which, on the wrists and ankles of the local fair ones, continually give
me fresh food for admiration. Like every decent master-craftsman he
had all his tools with him, consisting of a pair of bellows, three
crucibles and a hammer—nothing more, apparently. He was quite
willing to show his skill, and in a twinkling had fixed his bellows on
the ground. They are simply two goat-skins, taken off whole, the four
legs being closed by knots, while the upper opening, intended to
admit the air, is kept stretched by two pieces of wood. At the lower
end of the skin a smaller opening is left into which a wooden tube is
stuck. The fundi has quickly borrowed a heap of wood-embers from
the nearest hut; he then fixes the free ends of the two tubes into an
earthen pipe, and clamps them to the ground by means of a bent
piece of wood. Now he fills one of his small clay crucibles, the dross
on which shows that they have been long in use, with the yellow
material, places it in the midst of the embers, which, at present are
only faintly glimmering, and begins his work. In quick alternation
the smith’s two hands move up and down with the open ends of the
bellows; as he raises his hand he holds the slit wide open, so as to let
the air enter the skin bag unhindered. In pressing it down he closes
the bag, and the air puffs through the bamboo tube and clay pipe into
the fire, which quickly burns up. The smith, however, does not keep
on with this work, but beckons to another man, who relieves him at
the bellows, while he takes some more tools out of a large skin pouch
carried on his back. I look on in wonder as, with a smooth round
stick about the thickness of a finger, he bores a few vertical holes into
the clean sand of the soil. This should not be difficult, yet the man
seems to be taking great pains over it. Then he fastens down to the
ground, with a couple of wooden clamps, a neat little trough made by
splitting a joint of bamboo in half, so that the ends are closed by the
two knots. At last the yellow metal has attained the right consistency,
and the fundi lifts the crucible from the fire by means of two sticks
split at the end to serve as tongs. A short swift turn to the left—a
tilting of the crucible—and the molten brass, hissing and giving forth
clouds of smoke, flows first into the bamboo mould and then into the
holes in the ground.
The technique of this backwoods craftsman may not be very far
advanced, but it cannot be denied that he knows how to obtain an
adequate result by the simplest means. The ladies of highest rank in
this country—that is to say, those who can afford it, wear two kinds
of these massive brass rings, one cylindrical, the other semicircular
in section. The latter are cast in the most ingenious way in the
bamboo mould, the former in the circular hole in the sand. It is quite
a simple matter for the fundi to fit these bars to the limbs of his fair
customers; with a few light strokes of his hammer he bends the
pliable brass round arm or ankle without further inconvenience to
the wearer.
SHAPING THE POT

SMOOTHING WITH MAIZE-COB

CUTTING THE EDGE

 FINISHING THE BOTTOM

LAST SMOOTHING BEFORE

BURNING

FIRING THE BRUSH-PILE

 LIGHTING THE FARTHER SIDE OF
THE PILE

TURNING THE RED-HOT VESSEL

NYASA WOMAN MAKING POTS AT MASASI

Pottery is an art which must always and everywhere excite the
interest of the student, just because it is so intimately connected with
the development of human culture, and because its relics are one of
the principal factors in the reconstruction of our own condition in
prehistoric times. I shall always remember with pleasure the two or
three afternoons at Masasi when Salim Matola’s mother, a slightly-
built, graceful, pleasant-looking woman, explained to me with
touching patience, by means of concrete illustrations, the ceramic art
of her people. The only implements for this primitive process were a
lump of clay in her left hand, and in the right a calabash containing
the following valuables: the fragment of a maize-cob stripped of all
its grains, a smooth, oval pebble, about the size of a pigeon’s egg, a
few chips of gourd-shell, a bamboo splinter about the length of one’s
hand, a small shell, and a bunch of some herb resembling spinach.
 Nothing more. The woman scraped with the
shell a round, shallow hole in the soft, fine
sand of the soil, and, when an active young
girl had filled the calabash with water for her,
she began to knead the clay. As if by magic it
gradually assumed the shape of a rough but
already well-shaped vessel, which only wanted
a little touching up with the instruments
before mentioned. I looked out with the
MAKUA WOMAN closest attention for any indication of the use
MAKING A POT. of the potter’s wheel, in however rudimentary
SHOWS THE a form, but no—hapana (there is none). The
BEGINNINGS OF THE embryo pot stood firmly in its little
POTTER’S WHEEL
depression, and the woman walked round it in
a stooping posture, whether she was removing
small stones or similar foreign bodies with the maize-cob, smoothing
the inner or outer surface with the splinter of bamboo, or later, after
letting it dry for a day, pricking in the ornamentation with a pointed
bit of gourd-shell, or working out the bottom, or cutting the edge
with a sharp bamboo knife, or giving the last touches to the finished
vessel. This occupation of the women is infinitely toilsome, but it is
without doubt an accurate reproduction of the process in use among
our ancestors of the Neolithic and Bronze ages.
There is no doubt that the invention of pottery, an item in human
progress whose importance cannot be over-estimated, is due to
women. Rough, coarse and unfeeling, the men of the horde range
over the countryside. When the united cunning of the hunters has
succeeded in killing the game; not one of them thinks of carrying
home the spoil. A bright fire, kindled by a vigorous wielding of the
drill, is crackling beside them; the animal has been cleaned and cut
up secundum artem, and, after a slight singeing, will soon disappear
under their sharp teeth; no one all this time giving a single thought
to wife or child.
To what shifts, on the other hand, the primitive wife, and still more
the primitive mother, was put! Not even prehistoric stomachs could
endure an unvarying diet of raw food. Something or other suggested
the beneficial effect of hot water on the majority of approved but
indigestible dishes. Perhaps a neighbour had tried holding the hard
roots or tubers over the fire in a calabash filled with water—or maybe
an ostrich-egg-shell, or a hastily improvised vessel of bark. They
became much softer and more palatable than they had previously
been; but, unfortunately, the vessel could not stand the fire and got
charred on the outside. That can be remedied, thought our
ancestress, and plastered a layer of wet clay round a similar vessel.
This is an improvement; the cooking utensil remains uninjured, but
the heat of the fire has shrunk it, so that it is loose in its shell. The
next step is to detach it, so, with a firm grip and a jerk, shell and
kernel are separated, and pottery is invented. Perhaps, however, the
discovery which led to an intelligent use of the burnt-clay shell, was
made in a slightly different way. Ostrich-eggs and calabashes are not
to be found in every part of the world, but everywhere mankind has
arrived at the art of making baskets out of pliant materials, such as
bark, bast, strips of palm-leaf, supple twigs, etc. Our inventor has no
water-tight vessel provided by nature. “Never mind, let us line the
basket with clay.” This answers the purpose, but alas! the basket gets
burnt over the blazing fire, the woman watches the process of
cooking with increasing uneasiness, fearing a leak, but no leak
appears. The food, done to a turn, is eaten with peculiar relish; and
the cooking-vessel is examined, half in curiosity, half in satisfaction
at the result. The plastic clay is now hard as stone, and at the same
time looks exceedingly well, for the neat plaiting of the burnt basket
is traced all over it in a pretty pattern. Thus, simultaneously with
pottery, its ornamentation was invented.
Primitive woman has another claim to respect. It was the man,
roving abroad, who invented the art of producing fire at will, but the
woman, unable to imitate him in this, has been a Vestal from the
earliest times. Nothing gives so much trouble as the keeping alight of
the smouldering brand, and, above all, when all the men are absent
from the camp. Heavy rain-clouds gather, already the first large
drops are falling, the first gusts of the storm rage over the plain. The
little flame, a greater anxiety to the woman than her own children,
flickers unsteadily in the blast. What is to be done? A sudden thought
occurs to her, and in an instant she has constructed a primitive hut
out of strips of bark, to protect the flame against rain and wind.
This, or something very like it, was the way in which the principle
of the house was discovered; and even the most hardened misogynist
cannot fairly refuse a woman the credit of it. The protection of the
hearth-fire from the weather is the germ from which the human
dwelling was evolved. Men had little, if any share, in this forward
step, and that only at a late stage. Even at the present day, the
plastering of the housewall with clay and the manufacture of pottery
are exclusively the women’s business. These are two very significant
survivals. Our European kitchen-garden, too, is originally a woman’s
invention, and the hoe, the primitive instrument of agriculture, is,
characteristically enough, still used in this department. But the
noblest achievement which we owe to the other sex is unquestionably
the art of cookery. Roasting alone—the oldest process—is one for
which men took the hint (a very obvious one) from nature. It must
have been suggested by the scorched carcase of some animal
overtaken by the destructive forest-fires. But boiling—the process of
improving organic substances by the help of water heated to boiling-
point—is a much later discovery. It is so recent that it has not even
yet penetrated to all parts of the world. The Polynesians understand
how to steam food, that is, to cook it, neatly wrapped in leaves, in a
hole in the earth between hot stones, the air being excluded, and
(sometimes) a few drops of water sprinkled on the stones; but they
do not understand boiling.
To come back from this digression, we find that the slender Nyasa
woman has, after once more carefully examining the finished pot,
put it aside in the shade to dry. On the following day she sends me
word by her son, Salim Matola, who is always on hand, that she is
going to do the burning, and, on coming out of my house, I find her
already hard at work. She has spread on the ground a layer of very
dry sticks, about as thick as one’s thumb, has laid the pot (now of a
yellowish-grey colour) on them, and is piling brushwood round it.
My faithful Pesa mbili, the mnyampara, who has been standing by,
most obligingly, with a lighted stick, now hands it to her. Both of
them, blowing steadily, light the pile on the lee side, and, when the
flame begins to catch, on the weather side also. Soon the whole is in a
blaze, but the dry fuel is quickly consumed and the fire dies down, so
that we see the red-hot vessel rising from the ashes. The woman
turns it continually with a long stick, sometimes one way and
sometimes another, so that it may be evenly heated all over. In
twenty minutes she rolls it out of the ash-heap, takes up the bundle
of spinach, which has been lying for two days in a jar of water, and
sprinkles the red-hot clay with it. The places where the drops fall are
marked by black spots on the uniform reddish-brown surface. With a
sigh of relief, and with visible satisfaction, the woman rises to an
erect position; she is standing just in a line between me and the fire,
from which a cloud of smoke is just rising: I press the ball of my
camera, the shutter clicks—the apotheosis is achieved! Like a
priestess, representative of her inventive sex, the graceful woman
stands: at her feet the hearth-fire she has given us beside her the
invention she has devised for us, in the background the home she has
built for us.
At Newala, also, I have had the manufacture of pottery carried on
in my presence. Technically the process is better than that already
described, for here we find the beginnings of the potter’s wheel,
which does not seem to exist in the plains; at least I have seen
nothing of the sort. The artist, a frightfully stupid Makua woman, did
not make a depression in the ground to receive the pot she was about
to shape, but used instead a large potsherd. Otherwise, she went to
work in much the same way as Salim’s mother, except that she saved
herself the trouble of walking round and round her work by squatting
at her ease and letting the pot and potsherd rotate round her; this is
surely the first step towards a machine. But it does not follow that
the pot was improved by the process. It is true that it was beautifully
rounded and presented a very creditable appearance when finished,
but the numerous large and small vessels which I have seen, and, in
part, collected, in the “less advanced” districts, are no less so. We
moderns imagine that instruments of precision are necessary to
produce excellent results. Go to the prehistoric collections of our
museums and look at the pots, urns and bowls of our ancestors in the
dim ages of the past, and you will at once perceive your error.
MAKING LONGITUDINAL CUT IN
BARK

DRAWING THE BARK OFF THE LOG

REMOVING THE OUTER BARK

 BEATING THE BARK

WORKING THE BARK-CLOTH AFTER BEATING, TO MAKE IT

SOFT

MANUFACTURE OF BARK-CLOTH AT NEWALA

To-day, nearly the whole population of German East Africa is
clothed in imported calico. This was not always the case; even now in
some parts of the north dressed skins are still the prevailing wear,
and in the north-western districts—east and north of Lake
Tanganyika—lies a zone where bark-cloth has not yet been
superseded. Probably not many generations have passed since such
bark fabrics and kilts of skins were the only clothing even in the
south. Even to-day, large quantities of this bright-red or drab
material are still to be found; but if we wish to see it, we must look in
the granaries and on the drying stages inside the native huts, where
it serves less ambitious uses as wrappings for those seeds and fruits
which require to be packed with special care. The salt produced at
Masasi, too, is packed for transport to a distance in large sheets of
bark-cloth. Wherever I found it in any degree possible, I studied the
process of making this cloth. The native requisitioned for the
purpose arrived, carrying a log between two and three yards long and
as thick as his thigh, and nothing else except a curiously-shaped
mallet and the usual long, sharp and pointed knife which all men and
boys wear in a belt at their backs without a sheath—horribile dictu!
[51]
Silently he squats down before me, and with two rapid cuts has
drawn a couple of circles round the log some two yards apart, and
slits the bark lengthwise between them with the point of his knife.
With evident care, he then scrapes off the outer rind all round the
log, so that in a quarter of an hour the inner red layer of the bark
shows up brightly-coloured between the two untouched ends. With
some trouble and much caution, he now loosens the bark at one end,
and opens the cylinder. He then stands up, takes hold of the free
edge with both hands, and turning it inside out, slowly but steadily
pulls it off in one piece. Now comes the troublesome work of
scraping all superfluous particles of outer bark from the outside of
the long, narrow piece of material, while the inner side is carefully
scrutinised for defective spots. At last it is ready for beating. Having
signalled to a friend, who immediately places a bowl of water beside
him, the artificer damps his sheet of bark all over, seizes his mallet,
lays one end of the stuff on the smoothest spot of the log, and
hammers away slowly but continuously. “Very simple!” I think to
myself. “Why, I could do that, too!”—but I am forced to change my
opinions a little later on; for the beating is quite an art, if the fabric is
not to be beaten to pieces. To prevent the breaking of the fibres, the
stuff is several times folded across, so as to interpose several
thicknesses between the mallet and the block. At last the required
state is reached, and the fundi seizes the sheet, still folded, by both
ends, and wrings it out, or calls an assistant to take one end while he
holds the other. The cloth produced in this way is not nearly so fine
and uniform in texture as the famous Uganda bark-cloth, but it is
quite soft, and, above all, cheap.
Now, too, I examine the mallet. My craftsman has been using the
simpler but better form of this implement, a conical block of some
hard wood, its base—the striking surface—being scored across and
across with more or less deeply-cut grooves, and the handle stuck
into a hole in the middle. The other and earlier form of mallet is
shaped in the same way, but the head is fastened by an ingenious
network of bark strips into the split bamboo serving as a handle. The
observation so often made, that ancient customs persist longest in
connection with religious ceremonies and in the life of children, here
finds confirmation. As we shall soon see, bark-cloth is still worn
during the unyago,[52] having been prepared with special solemn
ceremonies; and many a mother, if she has no other garment handy,
will still put her little one into a kilt of bark-cloth, which, after all,
looks better, besides being more in keeping with its African
surroundings, than the ridiculous bit of print from Ulaya.
MAKUA WOMEN