• E-mail
• Print
• RSS

How do you spell A-L-I-G-N-M-E-N-T? Let me count the ways

Medical Staff Affairs Monthly, October 8, 2008

Hospitals and the communities they serve cannot afford poor physician-hospital relations. They need physicians and hospitals to ensure each other's success and provide quality medical care. In many medical communities, these critical relationships between physicians and hospitals are plagued by lack of trust and poor communication. Add to that the myriad factors causing a fundamental lack of alignment of incentives between physicians and hospitals, and you have an untenable proposition to achieve trust and collaboration. These factors include financial misalignment as characterized by Diagnosis Related groups (DRGs) in which hospitals are paid a set amount prospectively for an episode of care from Medicare Part A and physicians are paid "per click" retrospectively from Medicare Part B. From a purely financial viewpoint, the hospital is incented to get the patient "out" and the physician is incented to keep the patient "in." Consider the Emergency Medical Treatment and Active Labor Act of 1986, in which the burden for emergency department (ED) call is put on the hospital but can only be fulfilled by physicians (and you wonder why such rancor about ED call exists!). Or consider the National Patient Safety Goal of medication reconciliation. Once again, the burden is placed on the shoulders of the hospital, but the solution requires significant physician collaboration. The question arises, how do you spell alignment?

The traditional model of the self-governed medical staff is about 100 years old. It is a model that has served well and still has some fundamental validity in many organizations; however, it is not enough to provide solutions to the challenges never even dreamed about when the model was formulated. A recent publication, The Greeley Guide to New Medical Staff Models, identified 18 different models. Since then, the authors have identified even more models. With few exceptions, almost every one of the new models is likely to do a better job improving physician-hospital collaboration than the self-governed medical staff with broad membership and so-called advocacy models. Upon reflection, this comes as no surprise given that the lack of alignment and collaboration are driving the development of these new models.

Suppose that a key strategic initiative of the organization is to achieve the goal that physician-hospital relations are characterized by trust and collaboration. Couple this goal with the fundamental underpinning of aligning incentives that are currently out of joint, and you'll see how the following models alone or in combination with each other in the same organization may drive the desired goal:

• Joint ventures in which risk, gain, and equity are shared in a defined business venture or clinical service line.
• Physician-Hospital Organizations (PHO), which were popular in the mid-1990s as a vehicle for managed care contracting and assuming risk under capitation that never materialized in many markets. But what if this entity can be resurrected to structure alignment and risk-gain sharing for pay-for-performance measures? Alternatively, it could be used as a revenue sharing model in one global bundled DRG payment demonstration project.
• Management Services Organizations (MSO), which were popular in the 1990s to help physician practices succeed. Although they may still play this role, how about the MSO being the vehicle for adoption and implementation of a system-wide, community based electronic medical record marrying the technological needs for information of physicians and hospitals?
• Service line management in selected clinical areas such as oncology, cardiovascular, maternal-child, endovascular, or neurosciences. Each service line is run jointly by an administrative manager and a physician manager who share overall responsibility for the quality, financial performance and market share growth of the service line.
• Physician-hospital compact in which physicians and the hospital define what each needs from the other to achieve success. More importantly, what commitment does each party make to the other to implement trust and collaboration? For example, the hospital commits to provide Web-based access to physicians for all patient-related data, including labs, imaging, cardiac studies, consults, discharge summaries, and so forth, but in turn the physicians commit to use the hospital-based computerized physician order entry system to ensure complete, legible, dated/timed orders that meet all national accreditation standards and safety goals.
• Physician councils for ensuring effective and multiple channels of communication between physicians and hospital decision-makers. Although this may be a role of the medical executive committee (MEC) in some organizations, the MEC is often not always effective, and the physician councils may fill the gap.
• Physician employment to align incentives financially and to establish expectations through the employment agreement.
• Physician contracting, in which the intent is to align financial and performance incentives through a contract as opposed to an employment agreement.

How is a medical staff or a hospital to choose the right model or models that best meet the needs of the hospital and physicians? To begin, start with the vision, which is to achieve physician success, hospital success, and great patient care. The next step is a serious look at aligning strategic goals of the hospital and the medical staff and displaying the openness and flexibility to consider new ways of interacting with each other. The Greeley Company has worked extensively with medical staffs and hospitals across the country around issues of trust and collaboration for years and now actively works in the space of education training and implementation of many of these new models. Let us know if we can be of help.

Until next time, be the best help you can be to your organization.

William K. Cors, MD, MMM, FACPE, CMSL
Vice President Medical Staff Services
The Greeley Company

• Comment
• E-mail to a Colleague
• Print
• RSS
• Archive

Comments