3. Consolidation isn't the only answer. In healthcare today, growth isn't just about market share and margin; it's about developing an integrated network that can provide coordinated care to ultimately reduce healthcare costs.
To arrive at that end, financial leaders must calculate the path to growth: physician employment, joint venture, or merger/acquisition. A blend of all of these is what many organizations are using, but structuring contracts that foster alignment between parties is often the neglected ingredient. That can turn a service line gap solution into a big problem.
I've written extensively about hospital-physician alignment and one organization's approach stands out: Health Quest, a three-hospital system in Lagrangeville, NY. It designed compensation and incentive structures that focus on quality to drive alignment.
Other organizations are also doing this, but what makes Health Quest's approach unique is that it has worked with its physicians to determine the metrics used to measure quality.
Moreover, Health Quest created a management team consisting of a physician and administrator to run its service lines. Physician bonuses are based 70% on quality and 30% on patient satisfaction for five agreed-upon metrics. The percentage of bonus paid to each physician is based on whether the participant reaches a baseline goal, a target goal, or a stretch goal.