Physician Alignment is Becoming Risky Business

Press Releases, September 11, 2014

Physician Alignment is Becoming Risky Business
New HealthLeaders Media survey reveals that 90% of healthcare executives will pursue at-risk compensation among employed and independent physicians, along with other critical alignment initiatives

Brentwood, TN. – September 11, 2014 – 
As healthcare reform intensifies efforts to improve care delivery and value, physician-hospital alignment has never been more strategically important.  Healthcare organizations need physicians not just to accommodate change but to lead change as care delivery is transformed. Meanwhile, incentive schemes are in flux, with effectiveness metrics starting to replace productivity goals, making physician engagement a business imperative.

A new independent HealthLeaders Media Premium report, Physician Alignment: New Leadership Models for Integration, supported by MedSynergies, explores how a new focus on physician leadership, care transformation, and efficiency can propel the goal of physician alignment. The report includes data from a survey of the 7,000-member HealthLeaders Media Council, along with a new segmentation tool that allows access to specific data based on setting, revenue, and more. The free version can be downloaded at

One of the leading findings of the study is that 55% of respondents say they will move toward or emphasize clinical integration with primary care physicians over the next year.

“This is a significant and ongoing task in aligning healthcare systems across the entire care continuum at the market level,” says John R. Thomas, CEO of MedSynergies, who sponsored the report. “Clinical integration and alignment requires an initial high-level strategy based on a foundation of collaboration between hospitals, physicians, and all caregivers to improve the quality of care, patient experience, and patient access—all while lowering the cost of care.”

Under the Patient Protection and Affordable Care Act, hospitals and physicians are required to share risk related to care outcomes and savings. Adherence to that law is on the rise, with four-fifths of healthcare organizations (79%) saying they have at least some portion of compensation at risk for their employed physician staff. That percentage will increase to 90% within three years. These risk-sharing relationships demand considerable collaboration between what Thomas calls “historically disparate groups” of clinical and business leaders, and will require significant investments in technology, workflow, care management systems, and governance.

Jim VanderSteeg, executive vice president for hospital operations and chief operating officer for Covenant Health, underlines the importance of alignment strategies in a risk-sharing environment. “You can only do bundled payments if you have alignment with your physicians and you can trust your performance. If you can’t trust your performance, in a bundled payment arrangement you can lose tremendous amounts of money.”

In fact, the study reveals that money remains the primary driver of alignment initiatives; respondents cite improving system margin (63%) and maximizing system revenue (50%) as top business objectives of their physician alignment strategies.

“We know that we cannot serve our community if we don’t have strong financials,” says VanderSteeg. “You can’t separate the financials from the healthcare.”

In the pursuit of alignment, health systems are undertaking a number of key mechanisms. Physician employment, clinical integration, and patient-centered medical homes make up the top three.

Other compelling statistics from the report include:

  • The majority (57%) of health systems cite care redesign as a top goal of physician alignment.
  • Nearly one-quarter (23%) say that finding physicians with the right leadership skills is the most problematic aspect of physician management.
  • The top two motivators for physicians to seek/accept employment with a particular hospital or health system are the increasing costs of running their own practice (46%) and declining reimbursements (40%).

The report, available for purchase at, includes data segmentation, meeting guides, and three case studies featuring initiatives by Covenant Health, Providence Health & Services, and UnityPoint Health; and the Buying Power version, available for purchase at, is designed for healthcare industry suppliers and includes detailed drill-down data on purchasing trends and projections to aid sales strategies.

HealthLeaders Media

HealthLeaders Media, a division of BLR, is a leading multi-platform media company dedicated to meeting the business information needs of healthcare executives and professionals. As an integrated media company, HealthLeaders Media includes HealthLeaders magazine,, the HealthLeaders Media Intelligence Unit, HealthLeaders Media LIVE events, and California HealthFax. All these platforms may be found online at