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Sustainable Cost Reductions Born from a Question

Karen Minich-Pourshadi, for HealthLeaders Media, March 19, 2012

I often hear financial leaders say that cutting costs starts on the front line with doctors. You have to get the physicians on board with reducing utilization and acting efficiently if the organization is going to reduce costs. What CFOs and other healthcare leaders really seem to be asking is: Why do physicians make the decisions they do?

I came away with some insights—but not all the answers—earlier this month when attending the American Medical Group Association's national convention in San Diego. Over 2,000 providers and C-suite leaders from large multispecialty medical groups, IPAs, integrated healthcare delivery systems, and academic faculty practices attended the AMGA event, which was billed as a conference to "broaden leaders' strategic thinking and prepare them to meet the challenges of the new age of healthcare reform and the role they will play in leading the transformation of care delivery in this country."

I'm certain the attendees left with a lot of innovative ideas from both the presenters and their peers. When it comes to innovations for the payment system, however, I didn't hear much chatter. I did sense that attendees are experiencing the same question mark above their collective heads as their hospital and health system counterparts: why is the healthcare payment system failing, and how can we fix it?

During a networking session for large group practices that I attended, the moderator posed a simple question: "How do you create a culture of value?" The question sparked a few ideas and many other questions. Interestingly, many of the statements from these medical providers mirror the areas in which healthcare organizations also need more clarity. For financial leaders, this may help explain why providers aren't on board with your strategic cost-cutting vision—they are still trying to understand the problem.

Here are some of the thoughts of large group practice leaders on how to create a culture of value.

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