Hospital-Physician Alignment With Health Care Reform in Question

The Massachusetts Senate election has certainly changed our perspective on what health care reform means in the near term. Will it mean reform will be more incremental than the bills passed by the Senate and the House? That seems to be the general consensus.

There are certain key critical success factors we have identified for success regardless of the form and pace of health care reform:

• Payment reform will drive closer integration and alignment of physicians, hospitals, and post acute providers
• Health systems will need to stay even closer to their missions and their communities
• Care models will need to change as resources become more constrained; there is opportunity for successful health systems to improve quality, safety, and value
• Prudent strategic capital investment and effective operations will be essential from an economic stewardship perspective
• Effective development and application of technology, both clinical and HIT, will be an important tool in improving quality and financial performance

Provider integration at all levels is once again accelerating. Even if federal reform is dead, both federal demonstration programs and regional commercial health plan initiatives will continue to explore new models of reimbursement.

Payment reform systems (e.g. demonstration programs or pilot projects that put hospitals at financial risk for clinical events, bundled reimbursements that combine payments for all services associated with an episode of care) will increase the need for physicians and hospitals to create and function as integrated delivery.

Alignment of hospitals and their related physicians is critically important to the future success of local health care delivery. What does hospital physician “alignment” mean? Is this physician employment? Not necessarily. Does an employed physician group mean there is alignment? Again, not necessarily. As with the myriad of payment models being tested, a range of hospital-physician relationship models are being established to respond to the changing health care field: joint ventures, management, services agreements, professional services agreements, employment, and integrated delivery systems.

We would welcome your thoughts on the need for and best approach to hospital-physician alignment and will continue to explore the options further in the coming weeks.