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Physician Alignment Strategies to Counter Uncertainty

 |  By Michael Zeis  
   September 18, 2012

 

This article appears in the September 2012 issue of HealthLeaders magazine.

Physician alignment is, in part, about filling the beds and securing physician buy-in. According to Lloyd K. Ford, president and CEO of Riverview Regional Medical Center, a 281-bed acute care hospital in Gadsden, Ala., "It’s about maintaining current levels, plus growth. Ultimately, we are always looking for growth." Increasingly, healthcare organizations are adjusting the mix of physician organizational models to achieve that alignment.

The 2012 HealthLeaders Media Physician Alignment Survey shows that the medical staff model of working with independent physicians is in decline. While it is used by 67% of organizations today, looking forward three years, only 50% of respondents expect to include the medical staff model among their top three staffing models. "You are starting to see the end of the independent physician," says Ford, who served as lead advisor for this month’s Intelligence Report.

In the three-year time frame, nearly three-quarters (71%) of respondents expect their percentage of employed physicians to increase. 

 

Aligning to capture revenue, control costs
The changing revenue picture causes both physicians and hospitals to do some financial soul-searching. Independent private-practice physicians worry about declining reimbursements, just as hospitals do, and seek employment to stabilize their income. Many newly minted physicians seek employment right after their residencies, opting out of establishing and running a medical practice of their own.

Hospitals need to understand and control cost and perform in a way that will maximize reimbursement rates. Hospital IT systems monitor both financial and clinical events. But such systems, to be effective, need virtually universal buy-in to EMRs, CPOE, and other information-capture and analysis programs. Two-thirds (64%) of respondents place physician buy-in to quality and safety initiatives among the top three motivations behind their alignment strategy for employed physicians.

Vanguard Health Chicago is working toward the buy-in objective with independent physicians in addition to employed physicians. Louis D. Papoff, an advisor for the Intelligence Report, is vice president and chief financial officer of ambulatory operations for Vanguard Health Chicago, part of Vanguard Health Systems of Nashville. He says, "From a corporate point of view, our executives recognize and strongly believe that physician integration is essential. And it can be done alongside employing physicians. We want to be a system that is able to achieve ACO savings and achieve significant quality results that in turn can be used as leverage for better quality-based payments. The only way to achieve that would be to make sure that the private practitioners are appropriately and fully integrated
into our program."

 

Collaboration, metrics
Among the trends that healthcare organizations are exploring to achieve the goal of stronger hospital-physician alignment are care continuum collaboration, effective measurements, and improved communication.

More collaborators. The domain of patient care is extending beyond the hospital. Among the initiatives getting attention over the next three years will be integrated delivery systems, which 51% of respondents will be pursuing. Nearly half (48%) say the will look to develop patient-centered medical homes and collaborative care ACOs. Riverview is establishing new communication channels and new work flows in concert with nursing homes that care for some of the hospital’s discharged patients as a way of reducing readmissions. Riverview’s Ford explains, "We want to have an interaction with the nursing homes instead of having them routinely sending patients back to the hospital."

More metrics. About metrics,
William B. Riley, MD, chief medical officer at Memorial Hermann Sugar Land (Texas), a 79-licensed hospital that is one of 11 in the Houston area, says, "More and more quality metrics will be demanded of the hospital, and more and more quality metrics will be demanded of the physicians in private practice." Memorial Hermann has drawn a line in the sand. "Electronic order entry is mandated," says report advisor Riley, "and we are mandating the use of evidence-based medicine and protocols. We are mandating in areas that we think are critical to success with healthcare reform, whatever form it takes."

More communication.
If hospital administration has a direction it wants physicians to take, communication can make the task easier. Riley observes that physicians respond to information. He says, "If you give physicians information and data, physicians will usually be on board, and they will appreciate being part of the process." Respondents expect to see increases in physician involvement in leadership activities in the next three years. While three-quarters (74%) of organizations expect increased leadership involvement for their employed physicians over the next three years, nearly half (47%) also expect increased involvement of independent physicians.

 

The power to negotiate
The nature of the hospital-physician relationship is in flux, prompted by changes in reimbursement. For Papoff and Vanguard, the answer is clinical integration: "One of the benefits of our clinically integrated program is that we can negotiate better contracts because we have a better product to sell. We are doing more direct contracting with payers now, because we can go to big purchasers of healthcare and demonstrate our quality data.

Everything is transparent and out on the table. We are able to negotiate better reimbursement rates, and physicians in our clinically integrated program have gotten bonus checks back at the end of the year for the last two years. That reinforces our belief that alignment works, and it works because it provides patients with higher quality of care, and you potentially can be compensated at a higher rate because of that."

Healthcare organizations are reconfirming their core staffing strategies and making adjustments. For those that have been holding back because of an environment of uncertainty, the good news is that there is less to be uncertain about. The bad news is that fence-sitters may be left behind. The industry is moving toward the value-based purchasing reimbursement model. Organizations have accepted that they are being asked to do more with less. Clinical teams, support staff, and executives are adjusting to new work rules.

Reprint HLR0912-3


This article appears in the September 2012 issue of HealthLeaders magazine.

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Michael Zeis is a research analyst for HealthLeaders Media.

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