Council Connection: Physicians as Co-managers

This article appears in the September 2011 issue of HealthLeaders magazine.

Our annual industry survey shows that healthcare leaders are somewhat mixed on the effectiveness of comanagement models for service lines, with 43% finding them effective or very effective, 44% neutral, and 13% ineffective or very ineffective. In this era of healthcare reform, do you believe this shared governance model will become more relevant or less?

I’ve had a lot of success involving physicians in service lines, looking at the various vendors and the various expenses in the program. They have been very constructive in finding ways to improve quality, reduce length of stay, reduce the cost of implants. When they get involved, even without incentive, I have found they become very protective of the hospital’s resources and have serious discussions
with vendors about ‘You’ve got to do better than that.’ The objective should always be to have physicians actively and constructively involved.

There is a level of trust that goes back to the relationship being more important than whatever structure you put together. If they see a common goal and if they understand—either as an employer or as the hospital they choose to use—that it needs to remain financially viable, if they see that savings go to other programs they want to see developed, you get a lot of cooperation. If they perceive that all it does is pad the bonuses of administrators, they are probably not as willing to work with you.

A lot of it is relationships. They have to be docs you trust and, in essence, people you want to be in business with. You just can’t say ‘I am going to create this comanagement program. I can’t stand the docs but I am going to do it anyway.’ That is just asking for trouble. It truly has to be almost a joint venture. The service line has to be separated out. The ones that I have seen that work are a true comanagement. There is a board, and it’s not just a medical director but a lot of docs involved.

It can work with an employed model. It would be more on the incentive side. The advantage is there are some doctors who don’t want to be employed, and this is a way, especially with the specialties, to allow them to be engaged with the organization without being employed.

When everybody is working toward the same objective, everybody—physician and otherwise—is going to be cognizant of costs. If you have a management team made up of physicians and administrators, the doctors would say, for example, one of the reasons this particular service line costs so much is that the operating room turnaround is 28 minutes, and down the street at the ambulatory surgery center the turnaround is 15 minutes. The reason is that we as doctors manage it and it affects our revenues.

There is historically a culture of distrust that comes from a lack of transparency, a lack of understanding of each other’s perspectives. In most hospital systems the physicians have never been given the data in a way that allows them to be held accountable.

Creating alignment: Depending on the market and the situation, I find that clinical comanagement works well, sometimes as a subset of a joint venture. In joint ventures, we would give the management of the joint venture option to the physicians and we would find that they did a good job with driving down costs and improving satisfaction. There was an extra incentive as managers. In the models where there is just clinical comanagement, it works with a sophisticated group of physicians who are integrated and willing to work together as a team. When you have a fragmented medical staff or group of individuals, it is harder to drive that because you have to create some kind of legal structure.

If you don’t have good leadership that understands the model, then forget it; it’s not going to work. Some leaders still don’t understand the comanagement model, and they are trying to run it like they own everything—that there shouldn’t be any physician input.

And physicians aren’t used to being managed that way, so they have to have a good feel for the management above them.

There is an inherent distrust. CV and orthopedics are the big service lines, but the other place comanagement would work is OB, particularly with its liability. If you can package a group of doctors and get a liability policy, you can save them money and provide them with office space and bundle the whole thing. General medicine is still going to balk at comanagement.

Hospitalists are hospitalists. That is a different ball game with those guys. Call, management of the process to get the patient admitted and out of there quickly, utilization of their supplies—that kind of thing—they are a tougher group to manage, per se. And they are so short in supply that it is difficult to recruit for that. Most of those guys are looking at quality of life plus bucks and that is a difficult group to recruit to and manage for that.

This article appears in the September 2011 issue of HealthLeaders magazine.