The Dynamics of Physician Alignment
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"Physicians are trying to understand how they go from being just a commodity and become a value-added partner," says T. Clifford Deveny, MD, senior vice president for physician services and clinical integration for Catholic Health Initiatives, an Englewood, Colo.–based not-for-profit health system that operates 86 hospitals in 18 states.
When the very financial foundation of the industry is on the table, a different discussion can take place. Deveny, lead advisor for this report, says, "One issue is: How do you transform the physicians into accountable leaders, leaders who will help devise the models, or drive the models, or create financial sustainability? Physicians can't be passive."
Even though it is more common, still, for both parties to approach the alignment topic with income preservation in mind, larger groups with financial stability may provide an early view of what is to come in a more competitive environment. "There's been a lot of discussion around income preservation and keeping physicians happy," Deveny observes, "but mature physicians are saying, 'We're financially sustainable. We know where we're going. We're looking for a partner, a hospital system partner.' That tends to be a better discussion, but I would say that's the rare instance where you're seeing that type of a discussion."
An emerging competitive environment
When large groups with financial stability and access to a patient population of sufficient size come to the bargaining table, it is not necessarily the hospital's bargaining table. Deveny says, "Along the front range of Colorado and in California, I've seen large organized primary care physician practices that are taking a large amount of risk directly from insurance companies, typically through the Medicare Advantage plans."
Command over the referral base will increase the competitive stature of such large groups. "Because they're organized and they're controlling a large amount of dollars, in a sense they have created almost a commodity situation with specialists and with hospital systems," Deveney says. "And because their patients are loyal to them and [reduced] payments are motivating the private care doctors to send people to the highest-quality, lowest-cost venue, they're using data to move patients to different venues of care."
Deveny calls this the advocate model of primary care, in which acute care facilities are "beholden to the new requirements and the new expectations of the primary care physicians." At this stage, he does not know how extensible the model is. "Will they develop in other markets, or will the lack of capital or the lack of physician leadership to create the necessary culture keep it from happening?"
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