iProtean—Hospital-Physician Alignment

In mid-2011 Deloitte Center for Health Solutions surveyed a nationally representative random sample of U.S. primary care and specialist physicians to record their attitudes toward health reform and how it may affect the future practice of medicine.  Among the findings were that physicians are split as to whether health reform is a good start or a step in the wrong direction, and that many physicians consider a practice in a large integrated health system or a concierge medicine practice a viable alternative to private practice.


Deloitte noted in its report that “physicians recognize that private practice is decreasingly a career choice/option for most due to increased administrative complexity and regulatory compliance. Therefore, they are likely to affiliate with a ‘trusted partner’ that provides income security, administrative support and clinical autonomy within reason.”  (Physician Perspectives about Health Care Reform and the Future of the Medical Profession, December 2011.  Deloitte Center for Health Solutions.)


The iProtean course Hospital-Physician Alignment presents an overview of hospital-physician alignment in today’s health reform environment.  Healthcare experts Dan Grauman (DGA Partners), Robin Nagele, J.D. (Post & Schell), Anjana Patel, Esq. (Sills Cummis & Gross), Brian Wong, M.D. (The Bedside Trust) and Monte Dube, Esq. (Proskauer) discuss the historic relationship between hospitals and physicians, different alignment strategies and alignment models, benefits and pitfalls and the critical role of the board.


Brian Wong, M.D., The Bedside Trust

When we think about physician-hospital alignment, do you ever get this image that it feels like herding cats, that you’re trying to move the physicians in a certain direction . . . and the physicians, being rugged individualists, are just moving in every direction . . . it’s hard to get them moving in the same direction. I think a big part of that is a belief that’s ingrained [in them] almost from the beginning of medical school that we’re all unique individuals, that we’re autonomous and therefore fairly independent.


So when you combine this mindset of independence and autonomy, and self-direction, and then superimpose on that an institutional or system or organizational perspective that says we need to be moving together, for many physicians it’s a very foreign concept, and a very tricky and problematic issue.  It’s heightened now because of the environment of healthcare reform and of new incentives and regulations moving us towards greater integration and accountability.


Anjana Patel, Esq., Sills Cummis & Gross

Hospitals try to get the physicians to think like them—how can we save money, how can we at the same time maintain quality so when this patient is discharged, he’s not going to be readmitted.  So the whole point of alignment has been trying to get physicians to think along those lines.  Health reform, with the ACO model and especially if bundling is introduced, is basically going to force hospitals and physicians to work well together because at the end of the day, if Medicare sets the bar and the bar is, “We are going to value quality; we are going to value the efficient healthcare provider,” then commercial payers obviously will get on board with that.  Patients want that.  There is too much pressure for hospitals and physicians not to work well together.


Dan Grauman, DGA Partners

Increasingly physicians are looking to join perhaps a group or some other kind of model.  Clearly most hospitals need to have some flexibility and offer different options.  I’ve seen hospitals have different philosophies about this.  Some believe that the employment model is the one that is ultimately going to prevail and are working hard towards developing a larger and larger owned physician enterprise . . . Others operate in communities where the physicians are working hard to preserve autonomy and the historic preferred way of working in a voluntary medical staff, but they still need to be more collaborative and integrated.  So they’re trying to link through perhaps more thoughtful contractual arrangements like a co-management agreement where the physicians get involved in a very active way in helping to manage a particular clinical service at the hospital.


Brian Wong, M.D., The Bedside Trust

If you’ve seen one physician-hospital aligned organization, you’ve seen one physician-hospital aligned organization.  Every market place, every medical community has unique features in play—some which lend themselves more towards the employment of physicians, some which lend themselves towards lesser degrees of integration, management and the like.  The driving force, not necessarily the best force, but the driving force is the economics of healthcare.  I think that the economics are driving physicians to reexamine and reevaluate, “Is this really working for me?”  Many of them are beginning to conclude that it is not working.


On the other side of this, hospitals are saying, it would be so great if we could in fact integrate with our physicians, if we could be aligned with our physicians, if we had the same agenda.  After all, we’re all trying to take better care of our patients.  Wouldn’t it be better if instead of a hospital viewpoint to take care of patients and a physician viewpoint to take care of patients, that we sat across the table and tried to work out what is going to work out best—not so much for my organization, not so much for my practice, but rather what is going to work out best for our patients?  I would like to see that as the overarching imperative behind affiliations, associations and integration formation strategies.


Monte Dube, Esq., Proskauer

Your physicians will greatly appreciate it if you come to them with a full menu of options for potential alignment.  To the extent the hospital is perceived as pushing a particular type of arrangement, I think it’s likely you are going to get push back from your physicians.  Explain to them what the options are, discuss honestly and transparently with them what the pros and cons are of each, and then come to a common understanding about where on the continuum of alignment your organization and the physicians want to go.


Hospitals and physicians never get to the closing of a successful transaction unless and until several things happen.  Obviously you need to find a common structure and financial relationship that is perceived to be a win-win, but long before you ever get to the legal documents, the ground work has to be laid on the cultural values and trust issues.  That is to say, the physicians need to go into the transaction believing that the hospital will be a partner with them in a way that will be mutually advantageous.  Similarly, the hospital needs to go into the transaction with the understanding that their new physician partner may come to them with a different historical sense of value.


Robin Nagele, J.D., Post & Schell

One of the critical things that boards need to understand is that this needs to be a true partnership with the physicians on their staffs.  The changes, the development of clinical protocols, the changing way in which medicine is going to be delivered, can only be done with the leadership of the physicians.  They are the ones who have the know-how to understand how care should be delivered rationally.  They also have the stature within the physician community to get people on board. . .


Individual board members may be thinking, okay, what is my role in helping the hospital or the health system determine the path it wants to take in order to achieve better physician alignment?  The board’s role is an oversight role and I think in the most effective boards, it involves creating a dialogue with your senior executives, with your physician leaders, in a structured way, in the context of the board meetings, to say, we need to be thinking ahead.  We need to be thinking strategically over the next five years, over the next 10 years .. .   Saying to management, use the expertise of the medical leadership in working through these different issues . . . get the legal advice you need, get the business advice and the clinical advice and come back to us with a proposal we can react to and discuss.


For a complete list of iProtean courses, click here.


iProtean Symposium & Workshop

Mark the Date!! October 10 – 12, 2012 at The Lodge at Torrey Pines, La Jolla, CA. Faculty: Barry Bader, Dan Grauman, Marian Jennings and Brian Wong, M.D. For more information, click here.


For more information about iProtean, click here.