Physician, Hospital Alignment Critical for Success

The need for physicians and hospitals to be on the same page has perhaps never been greater. Shifting the way healthcare is delivered in the United States seems to be a certainty. Just exactly how this sea change comes about, however, remains to be seen.

Although it seems intuitive that doctors and hospitals would naturally have the same goals, anyone involved in healthcare recognizes that isn’t always the case. And even when goals do align, the strategy to achieve specific outcomes can vary widely among key team members. Assuming an “all ships rise on a rising tide” mentality, however, recognizes that what is good for one player is good for the entire team. In healthcare, this is largely coming to mean that what is best for the patient is ultimately best for providers, payers and facilities, as well.

Integration Strategies

The ways in which physicians assimilate into the hospital environment run the gamut, according to Kevin A. Boggs, senior vice president for PivotHealth, a Brentwood-based company that primarily works with health systems to develop physician integration strategies.

“The physician world has changed,” noted Boggs, “so now they are doing more with less.” He added, “More physicians want to be employed, but some still want to be independent. Quite frankly, it’s less expensive for the health system if they remain independent.” Still, cost often isn’t the driving factor for a health system when considering alignment with a practice.

Given the symbiotic nature of the relationship, facilities depend on a strong supply of physicians and specialists to meet staffing and service needs. There are a number of different models that have evolved allowing hospitals and physicians to address specific needs and integrate at a level comfortable for both parties.

Boggs said one option is to form a management services organization (MSO). This works well, he explained, when practices are looking to partner with someone to help with economies of scale but don’t want to be owned. “Community practices tap in to buy services at a level they can afford.” A common MSO arrangement would be for a hospital to provide specific management or administrative support such as human resources functions, an electronic medical records and/or practice management system, or perhaps even management of the physical plant. The physicians, however, maintain autonomy over their clinical practice.

A professional services agreement (PSA) is another option. “The practice entity remains independent, but the health system takes over the practice and buys services off that entity,” said Boggs. “It’s another step in the continuum.” He noted in this model, “The physician says, ‘I recognize I want a level of independence, but I can’t afford to stay independent.’” Many practices see this as a ‘best of both worlds’ option whereby the health system has ownership of administrative and operational functions but contracts with the physician group for clinical services.

At the far end of the spectrum is the complete employment model where the hospital owns and operates the practice. Even in this model, however, there is typically a clear delineation between the hospital and the wholly-owned practice. “Most of these are set up as a separate entity so they are identified as a physician practice and not an outpatient department,” he explained, citing a number of reasons for this structure including tax considerations.

With the shift toward the accountable care organization (ACO), Boggs said, “It is much more advantageous and much more controllable if the participating physicians are employed.” One reason is that it makes it easier to track and coordinate data among key ACO members. Another reason is that it provides much-needed support to physicians as the nation transitions to this form of care.

“It’s actually more cost efficient if we’re in healthcare rather than sick care,” Boggs noted. “From a scientific standpoint, it’s very interesting to providers, but it is a paradigm shift for them, as well,” he continued of the movement away from the fee-for-service model. “We have to try to help them (physicians) bridge that gap as they learn to operate in this new model. This is where I see health systems becoming the floor as they bridge the gap … they are kind of the safety net for physicians.” Boggs continued, “When physicians see their income start to fall, their natural inclination is to see more patients … drive volume … but that’s not necessarily best for the ACO or best for the patient. The employment model keeps (physicians’) income at a sustainable level.”

Despite the promise held by ACOs, Boggs readily recognizes there are many more questions than answers at this point in the game as to how to best manage patients … and that includes finding incentives for patients to take more responsibility for their own wellbeing.

No matter what model physicians and hospitals ultimately adopt, Boggs said, “They cannot go into this with hidden agendas. They have to recognize they’re in this together. Physicians can’t come in and say, ‘I’ve got to make all the money,’ nor can the hospital. They have to recognize they’re interdependent on each other.”

Creating a Team Mentality

One way to make sure physicians and hospital administrators stay on the same page is to create an environment where both have the freedom to express opinions and concerns. Jess Judy, senior vice president for Brentwood-based LifePoint Hospitals, said the hospital company always includes physicians at the governance level, including on the Board of Trustees, to ensure providers have a seat at the table. It is a core part of LifePoint’s strategy, he continued, to have physicians actively involved in hospital leadership both at a corporate level and within community facilities.

Lanny Copeland, MD, chief medical officer for LifePoint, concurred, saying, “Ask any of our CEOs in the field, and they really want physicians to succeed. The success of the hospital is closely tied to the success of physicians.”

Judy added strong nursing leadership is also an important component to success, and he said solutions really begin at the bedside. “The needed changes are going to come from the frontline … the people delivering healthcare on the floor,” he noted.

He said LifePoint has tried to create a corporate culture where any employee can bring an issue to the forefront. “We might not always get you the answer you’re looking for, but we’ll get you the answer that’s best for the organization and ultimately for the patient.” In between identifying a problem and coming up with a solution, Judy said there are many opportunities for dialogue and interchange. Committees meet regularly and report to department heads who share information with the medical executive committee that reports to the Board of Trustees. Judy said problems can’t be solved without a strong collaborative will.

Flexibility and a willingness to redefine responsibilities are also key. The status quo is changing, and successful hospitals and practitioners will have to figure out how to adapt to those changes. “Hospitals are already starting to shift their focus from inpatient care to outpatient care,” Judy said, adding that processes are being implemented to follow patients after discharge to minimize readmissions. “That’s typically not something hospitals have done before.”

Of the ACO model, Copeland said, “It begins to sow the seed of the change that’s coming.” He added, “We have to practice smarter and remember there are infinite needs with limited resources.” To that end, holding each other accountable for providing evidence-based medicine is a good place to start. “If we can all get on the same page, I think it will help us.”

Judy added, “We need physicians to engage differently with the hospital in redesigning the care delivery, and the limiting factor there is physician time and availability.” Copeland agreed, adding, “Things we can do in the hospital that make a physician’s life easier really do help align the two entities.”

With accountability spread across the continuum of care, the financial well-being of both physicians and hospitals ultimately depends on the two key players in the healthcare delivery system working together even more closely for the sake of the patient … and for themselves.

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