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Hospitals and Physicians: Partners in Accountable Care

HealthLeaders magazine, September 13, 2010

Gillean: When your physicians learn about the strategic vision from a physician leader, it really lends credibility. We also want to make sure our physician groups stay connected to their local locations. We're going through a whole rebranding process as well. We used to use the same name in every market. We're now allowing the local branding to be done. We're also establishing local committees that are part physician. They're not all physician because we're trying to link them to the activities in the market. We have hospitals, home health, long-term care, and long-term acute care in the market. We want the physicians to recognize all those other vehicles that are out there for that continuum of care, not just the acute care focus. So we're trying to develop a local committee that has physicians, administrative people, and medical group people, who sit down and talk about that specific market. So as a medical group, yes, we have overarching quality goals that everybody has to be working on, but there's going to be some local flavor to it, in that there are quality projects or things they need to be working on specific to that location and market.

HealthLeaders: On the employed side, how do you compensate physicians for both quality and cost?

Attebery: Built into our compensation model is a quality and customer satisfaction bonus, but no bonus for decreasing operating expenses in the group practice. Under our service line comanagement agreement on the cardiology side is a performance metric for cost. To earn the management agreement, physicians have to manage the cost side of the service line, which is obviously bigger than the cost of the cardiology group. If we didn't have this arrangement, I think we'd see cost go off track for the service line. But the deal is premised on the physicians collectively still being responsible for managing the service line, and cost is one element. We've had this model for seven years in cardiology and for the past couple years in critical care and oncology.

Harbeck: And I bet you see an improvement every time you do this, right?

Attebery: We do. And the level of engagement is amazing. The return on that investment is significant for the health system, and it's almost immediate. As a system you think you probably have done a pretty good job of managing costs, but you find that there's always a big opportunity with the physicians, getting more information about unit consumption and per-unit costs and how they do what they do, in terms of workflow, and how labor hours are generated.

HealthLeaders: Tim, is the physician leader on the comanagement side also the practice leader?

Attebery: That's the structure we've chosen. We want that one physician to be on both sides, leveraging his knowledge and relationships with colleagues, and we don't want any tension. If we had two leaders, there could be tension between the two.

Harbeck: That's interesting. There are different compensation philosophies on the hospital side. I would assume most hospitals would want the physicians on a revenue-minus-expense model, where the physician is participating in the cost side. But we run into chief financial officers who say, "Absolutely not. I only want our physicians thinking about the quality of delivery. And we don't want them worried about AR followup, or what the cost of something is." But revenue minus expense is clearly, from a financial point of view, the model that reduces the need for subsidy the fastest, and we're seeing this approach as the primary model for physician accountability. Gillean: We've gone primarily to the relative value unit model, with productivity, quality, and patient satisfaction measures as potential bonuses. It is a challenge, particularly in not-for-profit, safety-net hospitals. We're actually a not-for-profit, tax-exempt medical group as well. And so we have an IRS letter of determination that has some guidance there on what we need to do on the charity care. Depending on the market there can be a lot of uninsured patients who need care. For us to simply go to a revenue-minus-expense model, that's a real challenge in our world. We are pressed with that challenge regularly. What we try also to provide is financial information for the specific physician's practice, so he or she understands all those kinds of issues. I think the compensation model you pick will direct a lot of the work you have to do on the back end. It's just different work, depending on how you structure the model. And we do continue to have discussions with practice managers and local medical directors. They have a lot of opportunity to understand why we as a system are suggesting things be done a certain way. If they differ with that, then we go through a negotiation process. We also try to use benchmarking. So we can tell them, for example, "Based on your specialty, for your level of production, here's what the national models tell us is an appropriate number of employees. This is the benchmark we're tracking you against. Based on your level of production—in essence, the number of patients you're seeing in that clinic—we know what is normal to have as a support staff for you. If you're needing more, we're not seeing a real clear picture if there's a discrepancy." It comes down to the fact that these are businesses. The physicians have to understand that. If they were back on their own in a solo practice, managing that, they would be making different choices. And that's kind of a litmus test we try to get them back to—if you were living on this in a solo model, it would be revenue minus expenses and you'd be living off of this.

HealthLeaders: When we talk about integrating physicians into the system of care, we're seeing numerous alignment structures. Cardiology seems to be leading the way, but no system can simultaneously create new business models across all groups and service lines. How do you communicate to the medical staff the rationale for these arrangements in a way that is fair and equitable?

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