What Does Effective Hospital-Physician Alignment Mean?
Blog posted by Shannon Lorbiecki
I believe there is consensus that alignment of hospitals and their related physicians is critically important to the future of local health care delivery. So what does alignment mean?
Some believe that “fully integrated” health care systems, (e.g. the Mayo Clinic and the Cleveland Clinic), are organizational models that will set the standard for the future. Other organizations such as Sanford Health & MeritCare are moving aggressively to create a large regional fully owned system of hospitals and physicians. Still other entities are stopping short of a wholly owned organization and developing co-management strategies.
Rather than focus on structure I like to think about the key elements of alignment and let form follow function. My thoughts on essential elements of physician hospital alignment include:
- Physician leadership
- Economic alignment/shared risk around value
- Electronic health records (EHR) and transparency of quality and cost data
Physician leadership
Physician leadership development and engagement can happen in several ways:
- Develop physician leaders with business training—such as the dyad management approach where a physician leader and an administrative leader co-lead an organization, division, or service line
- Physicians in governance including nonprofit boards with physicians constituting a substantial portion of the board (up to a majority minus one)
- Physician/hospital compacts that outline commitment of physicians and hospital leadership to one another to improve patient care and further financial viability
Economic alignment and shared risk
Most organizations are not at the point of economic alignment and shared risk. Even employed physicians are generally paid on a productivity basis. We do want to reward physicians for being busy so balancing the need for productivity with payment for outcomes (value) is an enormous challenge. Health leaders need to be thinking about incentive programs based on quality and outcomes. Options include:
- Developing their own programs
- Participating in federal or state demonstrations
- Experimenting with new types of risk arrangements with commercial payers
With American Recovery and Reinvestment Act of 2009 funds, implementation of EHR has gotten a “push” in both hospitals and physician practices. Development of systems able to work effectively across the continuum will be important.