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The hospital CEO’s handbook on physician relations used to be relatively straightforward. All you really had to do was meet with the clinical staff leaders every now and then. When the folks in white coats made the inevitable pleas for a new piece of equipment or to transfer a troublesome nurse, the CEO could take it all “under advisement.” The physicians needed the hospital; after all, it was the only place to admit their sick patients. It was also the only place with those rooms full of big, expensive CT scanners. Hospitals helped those physicians make a good living and enjoy the social benefits of being a doctor in the community.

But soon the expensive clinical technology wasn’t quite as expensive anymore, and physicians realized they didn’t need the hospital quite as much. CEOs suddenly found themselves balancing a complex string of relationships with key physician partners that encompassed everything from basic satisfaction issues to increasingly intricate and creative business partnership models. Physicians became powerful—in some cases so powerful that CEOs have had to make concessions that seemed unimaginable a few years earlier, such as paying for emergency room call. Today’s CEOs have lost the upper hand, and they are not happy about it, says Richard Sheff, M.D., chairman and executive director of The Greeley Co. (Both The Greeley Co. and HealthLeaders Media are owned by HCPro Inc.)

“CEOs are basically being put in a position where a physician comes in and says, ‘I want to take my business out.’ And the CEO is in a position where they have to ask, ‘Can I have half of it?’” Sheff says.

The rules for successful partnerships with physicians are rewritten every day, but experts say a few best practices are emerging to help hospital senior leaders manage the new reality.

Get your head around a new context

Management guru Jim Collins, who recently shared his leadership mantra during the American Hospital Association’s annual leadership summit, writes that industries must “confront the brutal facts.” In the new relationship between hospitals and physicians, one fact that CEOs and boards may not want to hear is that physicians are the hospital’s competitors, partners, collaborators, customers and employees, all at the same time, Sheff says. “It is a complex, multilayered relationship to manage. The CEOs and their boards need to know that and get over it.”

The new context does not necessarily mean one that is driven purely by money. Jon Foster, CEO of St. David’s HealthCare, a seven-hospital system in Austin, Texas, says that in the past few years he has seen the hospital-physician relationship transform into one that emphasizes the transactions that can be made, rather than the relationships that can be built. In recent years, Foster has worked to make sure his system’s relationships with its approximately 2,000 allied physicians strike a balance between those two perspectives.

“I feared that in response to so much pressure economically that sometimes people can get overly transitional and lose sight of the relationship,” he says. “I don’t think either one of those at the extreme end is ultimately successful.”

Take your beating

When Shawn D. Morrow, CEO of Logan Medical Center, a 25-staffed-bed critical access hospital in Guthrie, Okla., was interviewing for his job, he recalls the chief of the medical staff being downright hostile.

When Morrow got the job, the relationship remained chilly. He finally pulled the physician leader aside and asked what the problem was. “He told me that working with the hospital was like running against a 40-mile-an-hour Oklahoma wind.” So Morrow asked if he could join the physician’s daily lunchtime runs to feel what that “against the wind” experience was like. “For the first month, he just vented,” Morrow says. But eventually the two developed a dialogue and a level of cooperation. Today, instead of division, the hospital has 100 percent physician participation in meetings for annual strategic planning, Morrow says.

In some cases, trust may be so broken that communication has made both sides defensive to the point of entrenchment. A few fortunate administrators may be able to move physician relationships forward without addressing the past, but in many cases, lead administrators may have to deal with old grudges.

Sheff says he met with one medical staff that was so angry with the hospital that they would not hear word one. So he organized a meeting where physicians were allowed to air their concerns, and the CEO was forced to listen without interrupting.

Win something together

Some doctors are not trained to be patient. They are used to gathering facts quickly to make a diagnosis, then either medicating it, radiating it or cutting it out. “It is not just, ‘fix it.’ It is, ‘fix it now,’” says Kenneth H. Cohn, M.D., a practicing surgeon and author of Better Communication for Better Care: Mastering the Physician-Administrator Collaboration.

Hospital administrators come from a different lot. They are accustomed to dealing with long processes and projects that may consume multiple resources and take years to complete. And administrators often deal with intractable issues—like the uninsured—that are beyond their power to fix.

Hospital leaders may want to consider creating some opportunities to demonstrate small victories to their physician partners, says Cohn. Even if the overall task is a long one, like a strategic initiative, it can be broken up with an emphasis on reporting results on a timetable at regular intervals—preferably every two weeks or monthly. “That chunking up of a large task into multiple pieces conveys a sense of momentum, accomplishment and quick wins,” Cohn says.

Don’t make the project more complex than it has to be, Sheff advises. Rapid-cycle improvement projects are an opportunity for the CEO to demonstrate action. “And if they see you can act, then they might be more patient in the places where you have to work through a process.”

Delegate some, but not all

Physician relations consistently tops the list of hospital CEO concerns, but that does not necessarily mean hospital CEOs must always shoulder the burden for those relationships.

Foster says he personally tries to keep up with a group of 40 to 50 of his key physician partners. But keeping up with them is more difficult than ever. “You don’t have the traditional medical staff structure to rely on to create the venue for the interaction,” he says. “In many instances, it is not about herding cats, it is about finding the cats.”

St. David’s has consolidated physician recruiting and physician relations into one office that reports directly to the CEO. The physician relations staff is used in the traditional role of a sales function for the hospital’s services, but they also play a role in information gathering and feedback, Foster says.

The CEO may consider delegating some physician relationships to other members of the senior leadership team, with each member taking six or seven key physicians, Sheff says. Physicians will respond to structured access, whether it is through the CEO or the management team, as long as they feel their concerns are being addressed.

But some relationships can’t be taken off the CEO’s list. When it comes to the superstars—those heavy admitters who could walk away with significant revenue—the CEO had better be in their back pocket.

“For those physicians who are accounting for a very significant portion of the revenue of the hospital, yes, he or she needs to know what the issues are and respond in a personal and timely kind of way,” Sheff says.

Cohn advises administrative leaders to understand that those “key” physicians may not necessarily be department chairs. The department chair may or may not filter the CEO’s message down to those other key physicians, because those physicians may not be in a team atmosphere. It has been said, Cohn adds, that “when most physicians think of a team, they think of a golf team.”

Strike first, strike hard

If the competition is in the physician’s ear about how great it would be to get out of the hospital, the CEO may want to preemptively strike. Cohn says that at virtually every national physicians’ meeting there are operators reaching out to doctors—and often, by the time CEOs reach out to physicians, it is too late.

Although it may be that overall the hospital is not as powerful as it used to be, the institution still has facilities, infrastructure and brand identity heavily weighted to its benefit, Cohn says. The hospital enjoys certain advantages in purchasing high-tech equipment, can often access capital at a lower rate than physicians and has market power in reimbursement from payors.

Also bear in mind that some would-be physician entrepreneurs are bluffing.

“Most physicians don’t have MBAs, and they don’t want to get involved with things like OSHA and OSHPD,” he says.

Create opportunities to understand physicians

Hospital senior leaders generally know what busy physicians do during the day, but it may be helpful to understand how their hectic schedules can often make interaction with the administration tense or impossible.

“It is a state of siege from the time you go in until the time you leave,” says Cohn. “There is very little time for reflection. And if one thing goes wrong, it pretty much blows up the schedule, which causes people to be frustrated and often lash out.”

Sheff says leaders may consider opening—or reopening—a physician’s dining room. Aside from the obvious time-saving benefits of keeping the physicians on the premises, it helps strengthen the medical staff culture and creates a place for daily interaction with the administration somewhere other than a meeting room. But wherever the interaction, the goal is the same: “Get inside the physicians’ heads. They will not do a lot of that for you. You need to figure out what is really important to them,” Sheff says.

Feedback tools like physician satisfaction surveys have their place, but they’re not a substitute for interaction, Foster says. “If surveys are all you ever rely on, you are dead. Usually that is pretty delayed information, and you are only getting feedback from people who bothered to fill out the survey to begin with.”

Share information, even if it hurts

Transparency is not a new buword in hospitals, but experts say the damage can be especially acute in physician relations if all parties are not working off of the same sheet of information.

“You have to share the good results and the bad results,” Cohn says. “Because people will hear about the bad results, and they will hear about them in a way that may not have been accurate. The transparency can be a bridge to trust. As people come to understand the complexity of hospital administration, very few physicians will say, ‘I could do that job better.’”

Jim Molpus is editor of HealthLeaders magazine and HealthLeaders Online News. He may be reached at jmolpus@healthleadersmedia.com.



Cultivating Winning Ways

Healthcare is not the only industry with a power play between management of the enterprise and its highly skilled stars. In the National Football League, owners have to take athletes with very different skills and merge them into one team with a common set of standards, all fitting under the organization’s budget. Sound familiar?

True, there is no business like the healthcare business. But that doesn’t mean other industries haven’t learned a few tricks for forging skilled teams:

From worst to first

Robert Kraft, chairman and CEO of the New England Patriots, was already successful in business when in 1994 he purchased the floundering football team for $172 million. Under Kraft’s stewardship, the Patriots have become the NFL’s model franchise—a success largely credited to the Patriots’ culture of teamwork and an absence of individualism. The team won three Super Bowl trophies in four years, compiled a record-setting 21-game winning streak and developed a $325 million state-of-the-art stadium in Foxborough, Mass., through private investment.

Kraft credits these achievements to staying true to his organization’s vision and surrounding himself with stellar performers. “As a business philosophy, you have to remain disciplined during the good times and the bad,” he says. “You have to plan and run your business for those tough times. In the end, I don’t think most people have that ability to persevere and get through the tough times.”

Kraft allows the coaching staff the freedom to run the team, but he has insisted that all members of his organization meet his high standards of professional conduct. “You have to hire the right people who know how to execute,” he says. “Our players, coaches and managers have to be people of good character who perform the way we want them. We have a saying with the Patriots: ‘Great players go to the Pro Bowl, but great teams go to the Super Bowl.’ The key to success in any industry is to assemble a great team.”

Flying high

In 2005, Fortune magazine listed Dallas-based Southwest Airlines as No. 5 among America’s top 10 most-admired corporations. The nation’s largest domestic air carrier serves 62 cities in 32 states and operates more than 3,000 flights per day. As executive vice president of customer operations, Donna Conover oversees Southwest’s ground operations, reservations, inflight operations and provisioning. She stresses the importance of providing sincere gestures of gratitude to members of the organization, no matter their rank or role.

“Everyone wants to be recognized for a job well-done,” Conover says. “And people at the top don’t keep the planes moving, so we need to support our talented people. That’s something Southwest Airlines does well, and it has become part of our corporate culture.”

Even talented staff members can have personality issues that make working with them difficult. Conover suggests taking great care when selecting employees and partners. “This is a customer service business inside and out,” she says. “We want to treat each other as well as we treat our customers.” She cautions that once you’ve partnered with a prima donna, you shouldn’t expect his or her attitude to change. “They will resist any attempt by the culture to change their behavior,” she says. “If you’ve hired a prima donna, you just have to treat them as such.”

Deal with disruption

Industrial and organizational psychologist Doug Reynolds, Ph.D., is the vice president of assessment technology at Development Dimension International, a human resource consulting firm headquartered in Bridgeville, Pa. As a researcher of workplace psychology, he has developed management simulators for various industries, including healthcare. Reynolds points out that many leaders do not actively deal with issues at the management level. “Don’t let minor issues become critical issues,” he says. “Set clear expectations for what you want done and how you want it done.”

Reynolds says gathering information about the effects of disruptive behavior can show the individual the perceptions he or she is creating. “Only then can you start the dialog about changing behavior,” he says.

—Rick Johnson