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How to Achieve Physician Practice Integration

 |  By Philip Betbeze  
   July 15, 2011

Recently, I was talking to the vice president of medical affairs at a major Midwest hospital system, and the conversation turned to physician employment. A physician himself, he reflected on the shift we've seen over the past dozen or so years on the subject of physician employment.

About a decade ago, hospitals were busily divesting themselves of hastily-acquired physician practices that weren't panning out as the hospitals had planned. What they found was that they were the (sometimes willing) victims of a bubble in physician practice valuation. Not only that, but they found that once they had acquired the practices, they had neither the expertise nor the systems to run them efficiently or to ensure the productivity of physicians who had become employees. 


WEBCAST: Cultivating Physician-Hospital Alignment in the ACO Era
When: July 20, 2011
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They couldn't get rid of these practices fast enough.
 
Anyway, he chuckled a little when he described the shift, and I'm not identifying him because he asked that the following be considered off the record.

"A big part of our future is in alignment and integration," he said. "Now, cardiologists, for one example, are knocking on our door and practically begging for employment. That allows us to be innovative in employing right groups who are really interested in working with systems and being measured for quality and productivity."

Yes, hospitals are once again interested in acquiring physician practices, mainly because it offers them a way to ensure accountability, quality, and productivity in an era where excellent performance on those measures is financially rewarded. And this desire for employment stretches far beyond cardiology. But the work is really in the integration, not the art of the deal.

We dove into that topic recently at a HealthLeaders Media Roundtable that I hosted here in Nashville. While no one had the absolutely foolproof recipe for attaining integration and accountability, they all have a lot of experience doing so, and it would behoove many leaders at hospitals and health systems that are neck deep in physician acquisition to listen to what they have to say.

Among the nuggets of wisdom:
  • "Health systems are approaching employment of physicians from a healthy level of conservatism."—Mike Murphy, Trinity Health
  • "Physicians feel like they have to be aligned with somebody. We're seeing that on the primary care side, but cardiology is probably the most impacted product line right now. Orthopedics is also heading in that direction. But alignment is what begins to create the desired effect, which is efficient care, better-quality care, and cost savings. When you get that alignment, it's amazing what can happen from a care standpoint."—Kent Wallace, Vanguard Health Systems

WEBCAST: Cultivating Physician-Hospital Alignment in the ACO Era
When: July 20, 2011
Register today
for this live event and webcast


  • The quality of care that's delivered is inversely proportional to the number of specialists per population. It's directly proportional to the number of primary care physicians per population. If you look at the procedure volumes and hospitalizations per thousand, you require far greater primary and extender populations than you do specialty.—Steve Moore, Catholic Health Initiatives

There's plenty more advice on one of the toughest challenges facing hospitals and health systems as they try to integrate lines of business that have long operated in silos. Check it out in this free report.

Philip Betbeze is the senior leadership editor at HealthLeaders.

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