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Do You Speak My Language?

Rick Johnson, for HealthLeaders Media, January 17, 2008
A cursory scan of news reports about the healthcare industry could make one wonder why hospitals and physicians today seem fiercely at odds with each other.

Docs are not only entering business ventures to open up new revenue streams, they're also competing in many cases directly against hospitals in profitable service lines.

Hospital administrators are complaining more and more that there are fewer physicians to maintain key services, and many of the physicians they have now refuse to take ED call or expect to get reimbursed for it.

Don't get me wrong, hospitals and physicians need each other now more than ever. Reimbursements remain tight and the cost of running a medical group has never been higher. Many physicians are looking to their hospital partners for relief in the form of administrative and technical support.

But true hospital-physician alignment is a tough task in no small part because hospitals and medical groups operate in such fundamentally different ways.

Hospital-physician alignment strategies was the topic of conversation at a recent HealthLeaders Media Roundtable that I hosted in downtown Nashville. As a reporter, I follow these issues closely, but there is no substitute for getting out of my cluttered office and having direct, in-person conversations with physicians and administrators.

Our panel of experts pointed out that medical groups and hospitals still struggle to speak the same language and understand each other's distinct business needs. This inability to communicate effectively can be a major barrier for dissimilar organizations that are trying to align objectives.

Jeffry James, CFO and COO for Christie Clinic, an 85-physician multispecialty medical group based in Champaign, IL, said that reimbursements, regulations, and expectations for medical groups and hospitals are so different that it's hard for a clinic to grasp all the things that hospitals need, and the lack of understanding can breed distrust.

"Take data transparency, for example," James said. "It's very difficult for us on the physician side to really understand how the numbers at the hospital work because they don't relate directly to what we do. When a hospital talks about losses per physician that they employ, we don't know whether that includes credit that the hospital may be receiving or not receiving for ancillary services. When a hospital talks about finances, it's hard for us to put it in terms that we can understand, because the way we account is different than the ways hospitals account."

So a hospital might share data with its volunteer medical staff in an effort to be transparent with its business partners, but if the physicians and medical group administrators don't fully understand the data, what good is it? Certainly, the data won't factor into the physicians' negotiation strategy to increase pay for call coverage.

The incentives today for hospital-physician alignment are great, said John Phillips, president of PivotHealth, a practice management firm based in Brentwood, TN. But the organizations need to begin a difficult dialog about how to align incentives.

And James said that in many cases it comes down to whether a hospital is proactive or reactive in reaching out to its medical staff. "The reactive hospital can do more harm than just encouraging a physician down the path of adding services for themselves; that stance actually pushes physicians away," he said. "In our market right now, we have one hospital that is very proactive, and one hospital that is being very reactive. This is pushing our physicians toward a hospital that they typically did not practice at. By proactive, I mean that the administration is talking to us about marketing strategies, EMR, and generally about how we get on the same page. At the same time, the reactive hospital's administration is talking about curtailing our privileges, recruiting against us, and changing the way unassigned call is provided. I think the way these two hospitals are interacting with volunteer medical staff is going to change the landscape in our market."

You can read much more online about this HealthLeaders Media Roundtable, which is featured in this month's issue of HealthLeaders magazine.


Rick Johnson is a senior editor with HealthLeaders Media. He can be reached at rjohnson@healthleadersmedia.com.

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