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Physician Alignment —What Does it Really Mean for the Hospital? 
CEO Summit Discussion Physician Alignment — What Does it Really Mean for the Hospital? The rate at which physicians are seeking employment has accelerated dramatically over the past year and shows no signs of letting up. It's easy enough to understand what physicians get out of hospital employment: work/life balance, income security, reduced/eliminated overhead costs and access to technology. What's not so clear is what hospitals gain from employing them. Business and regulatory advantages notwithstanding, strategic planning before acquiring practices and employing physicians is critical in order to align a hospital's goals and objectives with those of its medical community. Know When Employment Makes Sense Primary care doctors seek employment or acquisition of their practices more often than specialists, who tend to organize into larger, stronger groups and bill for higher-cost services and procedures. When analyzing practice profitability, the bottom line is important, but so too, is whether the physician's services will generate income. Drivers for hospitals' employment and/or purchase of practices can include competitive pressure, community size and geography (rural versus urban). The medical community culture (collaboration versus competition) may also drive such decisions. In some cases, hospitals are purchasing primary care practices or hiring particular kinds of specialists to keep an adequate supply of providers in the community. For some organizations, physician employment is a proactive part of a long-term growth strategy. For others, it's reactive, with bidding wars to protect the referral base. Still others decide to employ physicians on an opportunity-by-opportunity basis. Connect Independent Practices Most CEOs are working to connect their employed and independent physicians. However, they also are sorting through a plethora of information system choices and supporting multiple electronic health records (EHRs). Many CEOs said they can't afford to continue this pattern. Yet others said they've selected a single EHR solution and "mandated" it as the only one they can or will support. Participants called on vendors to collaborate on interoperability. There is No Universal Model for Organization Participants advised against forcing the hospital's management template on a group practice. Some participants have set up distinct practice corporations with common ownership, enabling a different structure for each with separate benefits, overtime policies, etc. Others tried to do so but experienced challenges when hospital-based medical staff and staff within the practice company perceived inequities regarding benefits. No matter what the model, successful arrangements must:  Involve physicians in management Foster an ownership mentality Include an effective governance structureAchieving Profitability Isn't Painless — But It's Possible Several participants emphasized the importance of analyzing profitability as a whole, including incremental referrals and income from ancillary services that might have gone elsewhere. As one participant stated: "The lines are blurring between outpatient and inpatient — you get rid of those artificial distinctions by measuring the total service-line performance." There was nearly universal agreement on the value of recruiting and employing experienced practice managers. The hospital mindset and approach don't mesh well with the practice environment. One CEO noted that maximizing the ratio of nurse practitioners and physician assistants to physicians has improved both physician satisfaction and quality. SUMMARY: Physician Alignment — What Does it Really Mean for the Hospital? The rate at which physicians are seeking employment has accelerateddramatically over the past year and keeps increasing. There are significant regional/community differences in the percentages ofphysicians being employed and the reasons they are employed (from the hospital's point of view). Factors include competitive pressures, community size and geography (rural versus urban) and community culture (collaboration versus competition). To be successful, it is crucial to have experienced practice managers responsiblefor managing physician practices and to take a holistic approach when analyzing profitability.
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