The Dynamic State of Physician-Hospital Alignment: Using Collaboration and Strategy to Drive Success

The Dynamic State of Physician-Hospital Alignment:

Using Collaboration and Strategy to Drive Success

Amy S. MacNultyNoblis Center for Health Innovation

Joel J. Reich, MD, FACEPEastern Connecticut Health Network

American College of Healthcare Executives 1

“Triumph of HOPEover

EXPERIENCE”Samuel Johnson, 1791

“Triumph of HOPEover

EXPERIENCE”Samuel Johnson, 1791


Learning ObjectivesRecognize key drivers of alignment.

Create a physician alignment plan.

Share “lessons learned”.


1

2

3

Agenda for TodayImperative for Alignment

• Transformation of Health Care Industry• The Mood of Medicine

Strategies that Work• Key Findings of National and ACPE Study• Alignment Model – How Effective is Your Organization?

How to Make it Work for You


Imperative for Alignment

5American College of Healthcare Executives

The Path to Alignment • To work together, especially in a joint intellectual

effort. (or, To cooperate treasonably, as with an enemy occupation force in one's country.)

• A promise or pledge. (or, A hostile meeting of opposing military forces in the course of a war)

• A state of agreement or cooperation among persons, groups, nations, etc., with a common cause or viewpoint.


Collaboration

Engagement

Alignment

Getting to a truly shared goalGetting to a truly shared goal

What’s Going on Out There?

• Demand & Access• Quality, Safety & Service• Financial viability • Health reform • Coverage expansion• Cost control• Medical home• Pay for performance

• Demand & Access• Quality, Safety & Service• Financial viability • Health reform • Coverage expansion• Cost control• Medical home• Pay for performance


UNHAPPINESS

Patients, physicians, hospitals & government agree on one thing:

Transformation of Health Care Industry Research Trends*

Consumer Trends

Industry Trends

Technology Trends

• Expansion of Telemedicine and Robotics

• Regenerative Medicine

• Restorative Medicine• Stem Cell Research

• The “Responsive Customer” and Medical Tourism

• Growing Incidence of Obesity

• Access to In Home Therapies and Easy Access to Medical Care

• Access to Online Medical Records

• Strained Access to Capital and Tax Exempt Scrutiny

• Increased Stress on the Workforce

• Physician/Hospital Relationships and Medical Homes

• Regional Data Sharing

• Electronic Medical Records/CPOE

• Expansion of Point of Care Testing

• Wireless Communication Devices

• Home Health Remote Monitoring and Expansion of RFID Technology

Source:* Piquepaille, R (06/27/08). A Portable Solar-Powered ECG Unit. EmergingTech http://blogs.zdnet.com/emergingtech/?p=992


Consolidation Among Providers is Altering Traditional Revenue Sources

• Consumers more aware of price and quality

• Baby boomers moving to the Medicare program

• Medicare and other payers expecting “value” for payment

• Commercial insurers under pressure from employers to reduce cost

• Consumers picking up more of the healthcare “tab”

• Hospitals seeking efficiencies• Hospitals diversifying, focusing

on outpatient and wellness care• Increased emphasis on

standardization, integration and consolidation of services

• Evolving physician/hospital relationships

Source: (06/08).Come Down from the Ledge. HealthLeaders. 32-36. Grote, Kurt, Levine, E., & Mango, P. US Hospitals for the 21st Century. HealthLeaders, Retrieved 08/11/08, from http://www.mckinseyquarterly.com/

Provider Issues Purchaser Issues


American College of Healthcare Executives

Physician ShortagePhysician Shortage

Aging population

Growing population

Longer life spans

Prevalence of chronic disease

Aging physician workforce

Changes in practice patterns

Education system constraintsNeed for

Physician Workforce Planning

Need for Physician Workforce Planning

Increasing Demand Shrinking Supply

Physician Shortage is a Result of Both Increasing Demand and Shrinking Supply

10

Physician Workforce is Aging…Like the Rest of Us


Physician Population is

Aging

47% of physicians > 5036% of physicians > 65

Physician Population is

Aging

47% of physicians > 5036% of physicians > 65

2007 Merritt Hawkins Survey

49% of physicians > 51 plan to make a change in next one to three years

Plan to retire 14%Plan to work on a temporary basis 4%Plan to work part-time 7%Plan to close their practice to new 8% patients Plan on taking a combination of the 7% above steps

2007 Merritt Hawkins Survey

49% of physicians > 51 plan to make a change in next one to three years

Plan to retire 14%Plan to work on a temporary basis 4%Plan to work part-time 7%Plan to close their practice to new 8% patients Plan on taking a combination of the 7% above steps

Source: 2007 Survey of Physicians 50 to 65 Years of Age, Merritt Hawkins & Associates, 2007

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Physician Workforce• Shortage: 124,000-159,300 by 2025

Variables: increased utilization, younger physicians work less hours

• Medical Schools increasing 15%…but physician supply dependent upon graduate medical education

Residency grads static for years

• Recruiting very difficult

American Association of Medical Colleges. The Complexities of Physician Supply and Demand Projections Through 2025. 2008.


The Decline in Physicians’ Real Income


Source: Health System Change Tracking Report No. 15, “Losing Ground: Physician Income, 1995-2003,” June 2006; Butcher, “Many Changes in Store as Physicians Become Employees,” Managed Care, July 2008.

Physicians’ Revenues Have Not Kept Pace with Expenses

% Increase1998 – 2008

Multi-specialty GroupPractice Operating Expenses: 65%Medicare Payment Rates: <2%

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7.6%8.6%

18.1%17.2%

14.0% 14.5%13.1%

14.5%

29 orless

30 – 34 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59 60+

Women represent 50 percent of US medical students

Women represent 50 percent of US medical students

24% of female physicians <50 work

part-timevs.

2% of male physicians

2005 to 2007 46% increase in physicians working part-time

% of All Physicians Practicing Part-time

Age Groups

Top Reason to Work Part-timeTop Reason to Work Part-time

MEN – Unrelated professional or personal pursuitsWOMEN – Family responsibilities (including pregnancy)

Source: 2007 Physician Retention Study, Cejka Search and AMGA; “Will There be Enough Doctors”, HealthLeaders, October 2007.



Still far below the national average

Likely to face physician

shortage in 2015

All agree demand outstrips production

Physician marketplace needs new physicians

Aging population will alter demand for

physician services

Shortage will continue to pose major problems

Physician labor market continues to be under extreme stress

Significant gap between supply and demand in 2020

Extant physician shortage will become more

severe

School too small to meet State’s growing

health care needs

State likely to face a severe shortage over next 20 years

Physician to population ratios

increasingly unfavorable

Shortages exist in many specialties

Looming shortage of physicians

Who will care for our patients?

Source: Center for Workforce Studies, Association of American Medical Colleges, August 2007.

Referrals tough to get…recruiting takes years

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The Falling Down Profession

“But in the days when a successful career was built on a number of tacitly recognized pillars-outsize pay, long-term security, impressive schooling and authority over grave matters-doctors and lawyers were perched atop them all.”

“But in the days when a successful career was built on a number of tacitly recognized pillars-outsize pay, long-term security, impressive schooling and authority over grave matters-doctors and lawyers were perched atop them all.”

Source: NY Times, January 6, 2008

“In a culture that prizes risk and outsize reward-where professional heroes are college dropouts with billion-dollar websites-some doctors and lawyers feel that they have slipped a notch in social-status, drifting towards the safe-and-staid realm of dentists and accountants.”

“In a culture that prizes risk and outsize reward-where professional heroes are college dropouts with billion-dollar websites-some doctors and lawyers feel that they have slipped a notch in social-status, drifting towards the safe-and-staid realm of dentists and accountants.”

The Mood of Medicine

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ACHE Top Issues 20071. Financial challenges 2. Care for the uninsured3. Physician Hospital Relations4. Quality 5. Personnel shortages 6. Patient Safety 7. Governmental mandates 8. Patient satisfaction 9. Capacity

1. Financial challenges 2. Care for the uninsured3. Physician Hospital Relations4. Quality 5. Personnel shortages 6. Patient Safety 7. Governmental mandates 8. Patient satisfaction 9. Capacity


Most top issues dependent upon physician hospital relations.Most top issues dependent upon physician hospital relations.

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ACHE Hospital-Physician Issues: 2006 Survey

• Physician recruitment• Physician-hospital competition as opposed to

collaboration • Hospital staff shortages• ED call coverage payment• Hospitalists


Personal communication with ACHE 10/08

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Better Together: Business Case for Alignment


Growth • Patients still follow physicians to hospitals for elective (profitable) procedures

Quality/safety & utilization

management

• Errors & rework costly in human life, suffering, time & dollars• Accreditation & licensing depend upon it • Process Improvement

Better use of everyone’s precious & costly timeSatisfied patients & staff = business growth

Reimbursement • P4P likely to morph into global payments• Joint hospital-physician mco contracting


Rating FactorCredit Rating

Aa A Baa “BIG”*Physician Dependency% of inpatient annual admissions contributed by top 10 leading physicians

Less than 10%

11%-39% Greaterthan 40%

CompositionDiversification of specialists

Broad Sufficient Some deficiencies

Deficient

Degree of physician loyalty

High Fairly High

Low Non-existent

Competition from active staff

Minimal Low Moderate High

Physician shortages and turnover

Limited Sufficient Highly Fluid

Pervasive

Recruitment Successful ChallengingAverage age 45 50 50-60 60+Academic and research orientation* Below Investment GradeSource: Adapted from Moody’s Not-For-Profit Hospitals and Health Systems Outlook, January

2008

“Contemporary” Credit RatingsGetting value/volume from active staffFocus on specialistsIntegration Strategies − Employment &

Employment Model− IT− Access to Joint venturesMedical Group activity in market− Strong medical group…risk

of leaving market− Small practices…risk of

losing marketJoint Venture philosophy− Half vs. none

“Contemporary” Credit RatingsGetting value/volume from active staffFocus on specialistsIntegration Strategies − Employment &

Employment Model− IT− Access to Joint venturesMedical Group activity in market− Strong medical group…risk

of leaving market− Small practices…risk of

losing marketJoint Venture philosophy− Half vs. none

Source: Adapted from Standard & Poor’s ACPE Presentation, New York, 4/08

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• Healthcare Strategy and Market Development (SHSMD) survey of 3,000 members

• 362 respondents• 60+ interviews

• ACPE survey of 10,000 members

• 400+ respondents• 15 interviews to-date

Focus: What strategies are being used to strengthen physician-hospital alignment, & which strategies are most effective?

Source: Noblis/AHA, Strategies for Strengthening Physician-Hospital Alignment: A National Study, 2006; ACPE Member Survey 2008

Hospital Perspective Physician Perspective


33%

47%

38%

36%

29%

17%

Doing very wellSome things are working; others need workMore serious problems

Hospital relationship with members of the active staff

Hospital relationship with referring physicians(not members of the active staff)

16%

41%

63%

52%

21%

7%

Doing very wellSome things are working; others need workMore serious problems

Private Practice Physician(PPP)

Hospital Employed

National 2005 survey (362 responses) ACPE 2008 survey (324 responses)

ACPE SurveyPrivate practice relationship significantly lower than employed physicians.

ACPE SurveyPrivate practice relationship significantly lower than employed physicians.


Whose Perception is Reality???

70%

34% 31% 30%

President/CEO Physician Relations Physician Leader Strategic Planner

Perceptions of Existing Relationships with Active StaffPercentage Rating “Very Positive”

Source: Noblis/SHSMD (AHA), Strategies for Strengthening Physician-Hospital Alignment: A National Study, 2006


Similar disconnect between CMO’s and Medical Directors in Noblis 2008 study

Similar disconnect between CMO’s and Medical Directors in Noblis 2008 study

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Imperative for Alignment


Do these trends reflect what you are observing? Do these trends reflect what you are observing?

Are there other trends you think will bring physicians and hospitals together or pull them further apart?

Are there other trends you think will bring physicians and hospitals together or pull them further apart?

• locally? • regionally? • nationally?

Strategies that Work



2005 Noblis National Study Key Findings

High quality/safe patient care

High quality/safe patient care

Substantive involvement in

decision making

Substantive involvement in

decision making

Physician leadership

development

Physician leadership

development

Support for physician practice

growth

Support for physician practice

growth

Selective alignment of economic

interests

Selective alignment of economic

interests

Infrastructure improvements to

increase efficiency/ accessibility of care

Infrastructure improvements to

increase efficiency/ accessibility of care

InterrelatedStrategies

Visibility/ accessibility of

CEO/Senior Management

Visibility/ accessibility of

CEO/Senior Management

Positive organizational

culture

Positive organizational

culture

Information systems

Information systems

Communication …Openness…

Trust…Respect

Communication …Openness…

Trust…Respect

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Noblis’ 2005 Physician-Hospital Alignment Study

1) Employ intensivists 75%

2) Employ a vice president of medical affairs (or equivalent leader) 74%

3) Employ hospitalists 74%

4) Provide financial support for recruitment to independent practices 72%

5) Sponsor retreats limited to physician leadership and senior management 70%

6) Have a formal physician relations program with professional staff responsible for spending time with active medical staff members and their office staffs in an effort to strengthen physician-hospital relationships

68%

7) Sponsor planning retreats that include board members, physicians, and senior management 68%

8) Actively involve physicians in planning and developing clinical service lines or centers of excellence

66%

9) Employ primary care physicians 65%

10) Employ some office-based specialists 64%

• Physicians are going to be either collaborative partners or active competitors.• Decreasing physician reimbursement causing physicians to spend more time in office

and/or competing with the hospital for ancillary services.• Of the 10 most effective strategies, half involved employing physicians.

KeyAlignmentFindings

TenMost

EffectiveAlignmentStrategies

% Respondents Ranking as Highly Effective


Noblis-ACPE 2008 Survey • Physician-hospital relations: disconnect at the top • Physician-Hospital alignment

Provide good serviceImprove efficiency/accessibility of care-information systems & medical staff structure Make QI/peer review part of the contract for medical directors, joint ventures

• Leadership & VPMA role• Physician on BOT and committees• Medical Staff strategic advisory

groups, planning retreatsAmerican College of Healthcare Executives 28

Alignment Model

Strategic initiativeStrategic initiative


Multiple parallel strategies & tacticsMultiple parallel strategies & tactics

Balance in key areasBalance in key areas

American College of Healthcare ExecutivesAmerican College of Healthcare Executives 30

Physician-Hospital Alignment Critical Success Factors

Medical staff leadershipMedical staff leadership


Specific strategic goals & tacticsSpecific strategic goals & tactics

Communication Communication

Strategic metrics ROI difficult to measure

Strategic metrics ROI difficult to measure

Physician-Hospital Alignment Strategic Plan Metrics

• Active staff size

• Average age

• % of admits by top 10%

• MSDP fulfillmentRecruitment goals

• Physician liaison visits

• Joint ventures

• ED call coverage

• Physician loyaltySplitters

• Physician leadership



RelationshipsFormal & informal leadersGovernance style How do they get along with each other?

How do you get along with them?


Relationships are time & energy intensive but not capital intensive strategies!

Relationships are time & energy intensive but not capital intensive strategies!

Who is the medical staff?

Who is the medical staff?

Who are you?

Who are you?

RELATIONSHIPS

What About this Autonomy Thing?


*Society for General and Internal Medicine Study Group

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Unique Highly Specialized Profession

Autonomy: “Independence of action.” *

Should we mourn or rejoice?

A return to patient care

RELATIONSHIPS


So…What Makes Physicians Really Unhappy?

• LifestyleWork scheduleCall

• Patient care: quality & service • Relationship with patients and colleagues• Administrative aspects of practice• Income• Future

• LifestyleWork scheduleCall

• Patient care: quality & service • Relationship with patients and colleagues• Administrative aspects of practice• Income• Future

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Dissatisfied physicians leave medicine at a rate of 2-3 x satisfied ones

Dissatisfied physicians leave medicine at a rate of 2-3 x satisfied ones RELATIONSHIPS


2008 Noblis-ACPE Study: What are the most important activities that strengthen

hospital-physician relationships?

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Listen, communicate, engage, dialogue, obtain input, e.g. surveyListen, communicate, engage, dialogue, obtain input, e.g. survey

Decision making, involve in leadership activities/developmentDecision making, involve in leadership activities/development

Improve efficiency, operations, productivityImprove efficiency, operations, productivity

Treat as partner, collaboratorTreat as partner, collaborator

Address data & IT, EMRAddress data & IT, EMR

Honesty, respect, trust, transparencyHonesty, respect, trust, transparency

Financial support, joint ventures, align incentivesFinancial support, joint ventures, align incentivesRELATIONSHIPS

Generational Profile

Generations predict values & behavior


Baby Boomers 1946-1964Generation X 1965-1977Generation Y 1978-1986

Generations in active practice

Baby Boomers

Baby Boomers

• Private practice identityEmployed MDs are slackers…

• Weathered tough storms: Medicare, Managed Care, Malpractice Crisis Resent that “everything” is given to employed physicians

• Succession PlanningPractice FMV may lead to acquisition & employment

• Medicine is a profession…not a lifestyleGen X & Gen Y

Gen X & Gen Y

RELATIONSHIPS

• Jealousy & competition

• Perceived & real alterations in referral patterns

• IT competency

• Mobility of employed physicians disruptive & expensive!

Generational Clashes


Tensions

RELATIONSHIPS

Hopeful News• Cultural values change….not basic commitment

• Quality and Peer Review

28% expect to stay at first job > 4 years

28% expect to stay at first job > 4 years

Economic Impact of Physician Relationships


Source: National Health Statistics Reports. US Department of Health and Human Services. Number 3, August 6

Percent of Non-Primary Care Office Visits Referred by Another Physician

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

RELATIONSHIPS

Difficult to Get Traction…When You are Playing in a Sandbox

• Education about each other’s interests• Entitlement to different things…• Social & educational sessions• Share technology: IT, EMR, robot • “Group counseling”• It’s our burden to understand them…


RELATIONSHIPS

It Might Be All About You…


RELATIONSHIPS

What are your generational views?

Are you physician friendly?

Have you really gotten over a bad piece of history?

What Management Can Do…


Practice what you preach: Build respect among senior executives

Be role model: Mentor your directors & managers

Clarify responsibilities: Thin line between front-line empowerment & interference

Promise only what you can deliver: Collective memory embarrasses elephants

RELATIONSHIPS

Trust• Please don’t start off by promising a

“new compact”• BOT, Executives and Medical Staff Leaders present

when major decisions are made. • Dialogue is a conversation between 2 or more people• Admit mistakes…only if you have ever made any• Acknowledge the past, live the present, and anticipate

the future • Getting to Yes really works…gaining an

understanding of the other party (empathy) is first step


RELATIONSHIPS

Leadership Development

Leadership Training


RELATIONSHIPS

BOT-Medical Staff-Executives retreats

Mentoring

Coaching


Physician Motivation

• Do the right thing for my patient• I am accountable for the care of my patient• Getting past “I can’t practice cookbook medicine” and “blame”• Help me get my job done…and have a life• Give me meaningful quality proposition & real power to

change things

• Peer pressure, competition and public reporting• Patient satisfaction: My patient vs. all patients • Risk management • Aligned incentives…sometimes


SERVICE

47

Intrinsic

Extrinsic

What do Physicians Want? • #1: How the administration responds to my ideas and needs • Easier to care for patients: timeliness of order fulfillment, nursing staff

reports, quality of nursing staff • Physicians most satisfied in their first 5 years and > 20 years on staff• Physicians employed by the hospital are more satisfied

than non-employed physicians• Surgeons are the least satisfied• Correlation between satisfied patients, employees,

& physicians


2008 Press Ganey Hospital Check-Up Report -Physician Perspectives on American Hospitals2008 Press Ganey Hospital Check-Up Report -Physician Perspectives on American Hospitals

SERVICE

Quality• Key Strategy… not a program… it is what we do… the

services, the processes• Long term physician and patient loyalty

• Unique opportunity to connect to both groups• Fulfillment of personal and institutional mission: Do the

right thing• Quality is better than free


SERVICE

Direct incentives:

150 P4P programs by government, insurers and businesses

Direct disincentives:

Public reporting, Never Events, lawsuits & regulatory enforcement

Quality & Physician Alignment Quality Culture: I’ll know it when I see it and feel it.


SERVICE

Medical Staff• Process I can trust…led by leaders I trust• Make it worth my while

Set meaningful goals that I can relate toGo for simple process changes that improve quality and work life

• Confidentiality is sacred…to the point permitted by law

Hospital• Clearly communicated commitment…and actions…to improve care,

services and processes • Delegation to clinicians • Elimination of mindless data collection and reporting

Clean usable data and let me figure out what it means

Quality is Good Business• Top 5: ACHE Top Issues• Strategic business goal• Direct financial incentives• Process Improvement

• Better use of everyone’s precious and costly time• Satisfied patients and staff = Business growth• Errors and rework are costly in human life, suffering,

time and dollars• Financial markets


SERVICE

Financial Markets Successful quality strategy

• Strong physician buy-in• Board of trustees (BOT) long-term strategy

Competitive differentiation• Evidence-based outcome measures• Improved patient safety

Financial performance• Consumer preference/demand = Market share growth• Better outcomes = Better payer reimbursement

Source: Moody’s Investors Service: Improving clinical quality and patient safety of greater importance to not-for-profit hospitals, May 2006.


SERVICE

The Value Proposition: EfficiencyWhat can I do for you today? What can I do for you today?


SERVICE

• What will give the physician some ROI on his\her time?

Systems that make sense for physician and staffImprove efficiency; decrease hassles

• Staffing & Support

vs. Look how much we have done for you….

Look how much we have done for you….

Infrastructure SupportSystem support

• Clinical staffLean ManagementMagnet Status

• Happy & available staff• Good communication• Independent…but collaborative

• Structure & staff to support, monitor, & measure QI, peer review, Department of Medical Affairs, IT, Physician Liaison

Compensation for time• Chairs and officers: quality/safety are essential role functions


SERVICE

Information Technology Information Technology• Provider Order Entry & data retrieval• Web Portals

Simple “no cost” data access from anywhereCompete with private laboratories

• Real-time transcription • Mobile voice & data devices for nurses, hospitalists, emergency physicians

IT & EMRs• Hospital &/or PHO lead

Hospital owned medical group has substantial impact on system selection • Integration with hospital systems

Bidirectional data transfer Server home & tech support

• Federal & private payer initiativesHospitals fund 85%


SERVICE

The Value Proposition: Hospitalists & AHPs

• Less call & less competition• Medicine

In-patient care• Surgery

OrthopedicsGeneral Surgery

• Ob-Laborist• AHPs

OrthopedicsGeneral SurgeryGI

• Intended consequencesConsistency, quality, P4P & utilizationSupport for specialists

• Unintended consequences Community physicians further awayAlienation of some patients Handoff risks: community to hospital care


SERVICE

Physician Liaison Program• Pattern recognition & early intervention

I can predict the past with 100% accuracyDatabase issue tracking

• Close the loop• Personalities• Relationships

Recruiters Medical Staff membersMedial staff leadersSenior Executives

• ROIAmerican College of Healthcare Executives 57

SERVICE


Physician-Hospital Alignment & Governance

• Mission…do the right thing for patients• Active involvement of Board• Physician & patient loyalty• Accreditation• Transparency/public reporting• Financial strength


GOVERNANCE

Best Practices for Board Involvement:

1. Get Educated2. Insist on the Numbers3. Recognize need for a Pluralistic

Approach4. Hold Leadership’s Feet to the

Fire5. Take Time to Connect with

Physicians YourselfSource: C. Clark, Senior Principal, Center for Health Innovation, Noblis

Best Practices for Board Involvement:

1. Get Educated2. Insist on the Numbers3. Recognize need for a Pluralistic

Approach4. Hold Leadership’s Feet to the

Fire5. Take Time to Connect with

Physicians YourselfSource: C. Clark, Senior Principal, Center for Health Innovation, Noblis

Let’s Get a Bit Personal Executive incentive compensation measures typically include:

• Profitability• Quality/safety outcomes• Core measures• MSDP/Physician recruiting • Physician satisfaction

Avoidance of Federal Enforcements

• Financial arrangements with physicians is a virtual minefield• DOJ & OIG enforcement actions for quality of care include civil &

criminal penaltiesFalse claimsJust plain old poor quality


GOVERNANCE


Hospital committee & DeptQI & Operational

Reports

MEC

MS Committeesand Departmental

QI&OperationalReports

Board PA/I CommitteeSYSTEM Level

Provides DirectionReceives reports & Identifies projects

Sends Report to Board

ECHN BOARD

Support provided by QI staff

PI report, & pertinent info and issues brought by MS reps to Board PA/I

Committee

PI report & pertinent info and issues brought by admin VP’s

to Board PA/I Committee

Care of Patent with …CHF,

Pneumonia, MI

Rapid Response Team

OFFICE OF PRES/CEO

QIC Administrative, Staff and Medical Staff Representatives

Reviews management and Medical Staff reports, CHA, CMS/Qualidigm/CPRO, and JCAHO reports & report card

data. Identifies & initiatesprojects with Medical Staff and

Administrative champions MS Peer Review Committees

Pertine

nt repo

rts & inf

o only Pertinent reports & info only

Requests projects

61

Governance Structure BOT

Bylaws, nominating process & committee structure that encourage physician participation & link to medical staffDirect connection with physicians for quality & credentialing

Medical StaffSupport staff for credentials, quality & peer review Bylaws issues• AHPs• ED call• Quality, safety & utilization compliance

Health law support


GOVERNANCE

Governance Style


GOVERNANCE

Medical Staff, Executives & BOT jointly

• Set planning goals• Make changes• Monitor outcomes

Communication

• CEO-Medical Staff Officers-BOT Chair

• Effective pathway to hear from physicians

Who are Physician Leaders?

• VPMA/CMO• Service Line/Program Medical

Directors


GOVERNANCE

Elected leaders

Opinion leaders

Contracted leaders

Being a Physician Leader

• May be difficult to identify true physician leaders

• Physicians may view leadership very differently than others

• Leaders able to maintain position in the heat of battle• Leaders who manage tough issues may pay the price

in clinical & personal life


GOVERNANCE

Changing Medical Staff Governance

• Loosely associated autonomous physicians

• Physicians needed place to care for patients

• Little incentive to participate in quality, safety & medical management

• Bylaws focused on individual rights • Medical Executive Committee (MEC)

Elected voluntary leadersInpatient medical staff business

Good ole days Now• Formal structure• 20% do 80% of care• Regulators: hospital is responsible for

care quality …physicians not so sure • Bylaws focused on quality, safety,

patient care• Only real authority is to restrict or

revoke privileges• MEC

Elected & contracted leadersQuality, safety, credentials Compliance


GOVERNANCE


Ventures• Joint Ventures• Service Line & Medical Directorships • Call Coverage Agreements• Information Technology-EMR• Employment • Incentive Based Payments


VENTURES

Legal AdviceNeed up-to-date, practical & reasonable counsel more than ever beforeNeed up-to-date, practical & reasonable counsel more than ever before


VENTURES

Numerous places to stumble & really get hurt… both with relationships & regulators Numerous places to stumble & really get hurt… both with relationships & regulators

Having to withdraw or modify promises to physicians due to unknown legal requirements is a frequent cause for loss of deal…& loss of trust.

Having to withdraw or modify promises to physicians due to unknown legal requirements is a frequent cause for loss of deal…& loss of trust.

Joint VenturesClinical Services

• ASC, Endoscopy, Imaging, Oncology-Radiation Therapy

Real Estate• Medical building REI trusts

Future?• Reimbursement • Aging & shrinking independent medical staff


VENTURES

Lessons Learned Regarding JVs

Up-front education is a must

“Joint ventures are very complex arrangements. There are a lot of legal barriers, which physicians do not have the patience to understand.”

“Physicians have a tendency to believe that the fact they can bring their patients to the JV will relieve them of the responsibility to invest cash. This is not true.”

Hospitals should expect to do the

legwork

“We have learned that you have to keep the joint-venture process simple. We have mostly solo practices and very small groups. Very few of our physicians have the knowledge and sophistication required to make joint ventures work. We have had to do most of the work to structure the ventures, because they simply do not have the resources that are needed.”

71

VENTURES


Medical Directorships • Reimbursement for officer, chair, chief,

medical director & other roles

• Role growing to manage specific services

• Quality, safety and efficiency with incentives

• Difficult to obtain valid FMV dataNew roles in rapidly changing environmentSeparating nonclinical compensation from clinical salary challenging MGMA, ACPE, Sullivan-Cotter surveys


VENTURES

Service Line Management • Hospital contracts with physician

management company to manage clinical service

• Opportunity for physicians to control clinical services, control costs, improve quality…. that's the good news and the bad news

• Hospital contracts with physician management company to manage clinical service

• Opportunity for physicians to control clinical services, control costs, improve quality…. that's the good news and the bad news


VENTURES

ED Call Coverage

• Emblematic of struggle between hospitals’ and physicians’needs & interests

• Time is $• Much larger factor in primary care-specialist

rifts than commonly acknowledged• Multiple legal tripwires to maneuver


VENTURES

ED Call Coverage• Solutions reflect empathy, business needs,

and communication

• OIG Advisory Letter (9/07)

• Multiple solutionsContracted rates for daily coverage above “fair share” obligationPayment guaranteesCreative finance plans

• EMTALA Community Coverage Plan


VENTURES

THE FABLE OF THE SURGEON & THE TENT

• Porridge for one is expensive

• The pot of gold at the end of the rainbow is a mirage

• The golden years aren’t


Physician Employment is Different This Time

• Substantial economic advantages for systems that integrate payers, hospitals and physicians

• View physicians as “fundamental strategic asset”• Greater emphasis on developing physician leadership

and systemized physician engagement***

• Primary care & specialty physicians• Younger (70-80%) & older physicians want it• Willingness to trade off autonomy for economic security• New generation seeking improved work/life balance

***• Payers shifting to incentive based payments, e.g. P4P

and Medical Homes

“This is the beginning of a fundamental

restructuring of how physicians function

in the health care system.”

William Jessee, MD, President of the Medical Group Management

Association.

“This is the beginning of a fundamental

restructuring of how physicians function

in the health care system.”

William Jessee, MD, President of the Medical Group Management

Association.

77

VENTURES


Hospital Group Employment

• Continuity of care within system• Hospital investment in IT/EMR• Joint physician & hospital contracting


VENTURES

• Practice management MCO enrollment, billing & reimbursement

• Step outside…way outside… of usual hospital roles

HR &LegalMedical DirectorProfessional medical group administrator

• Treat as capital investment• Data tracking of downstream revenue:

in-patient and ancillary testing• If you are paying for call

already…makes sense

• Inpatient & ambulatory care revenue• Quality, P4P, LOS enhancement value • Support for specialists

Business Structure

Managed Care Issues

ROI

Which Beans Do You Count?

Employment Pitfalls

• Assume loyalty of physicians…and manage just like other employees

• Failure to manage BOT, medical staff & executives’ expectations

• Assign functions to hospital Finance, HR, Legal & Business directors…without adequate preparation

• Overoptimistic growth projections • Failure to establish incentive compensation

& long-term comp plans


VENTURES

Medical Staff Development Plan (MSDP)


VENTURES

Community need

Business/Strategic need

Regulatory documentation of need

Plan for how to support new physicians• Loan security agreement Q&A and legal documents • Employment entity & infrastructure to make it happen

Physician Resource Assessment Model*

MARKET Assessment

MARKET Assessment

INTERNALAssessmentINTERNAL

Assessment

RECOMMENDED ADDITIONS to Physician

Staff

RECOMMENDED ADDITIONS to Physician

Staff

ProjectedCOMMUNITY

NEED

by Specialty

ProjectedHOSPITAL

NEED

by Specialty

Population Characteristics & Projections

Physician Demand Benchmarks

Consumer PreferencesHealth Status

Current Physician Supply

Mix of Specialties

Medical Staff Characteristics

Retirement Vulnerabilities

Perceived Need

Service Line & Geographic Growth Objectives

Quantitative Approach

Strong analytical approach

In-depth knowledge of physician demand benchmarks

Customized methodology

Qualitative Input

As much an art as a scienceMaking it relevant for your strategic prioritiesUnderstanding medical staff dynamics (generational differences, call coverage, productivity, loyalty)

81American College of Healthcare Executives * Source: Noblis Center for Health Innovation

MSDP Confounding Factors


Are the standard ratios still valid?

• Takes 1.3-1.5 to replace older physiciansOfficeED call

• EMTALA Community Call• Efficiency?

IT & EMRElectronic communication

How frequently do you need to update plan to stay current?

• Mobility by younger physicians• Competition

How do you count?

• Hospitalists • AHPs• Part time physicians

Younger and older physicians Do part time “FTEs” equal half of full time FTEs?

VENTURES

Recruiting • High level team

Broad input finds the good, bad & ugly early in process CEO involvement Understand the regs…use them…don’t hide behind them

• Candidate’s first impressions reflect organization process• Close the deal

Rapid decision-making for changing needsReady in HR, legal & communityContract templatesSalary information Offer what they want


VENTURES

Better Together or…Bitter Together?


VENTURES

Pay for PerformancePay for Performance

GainsharingGainsharing

Bundled paymentsBundled payments

Participatory bondsParticipatory bonds

Under ArrangementUnder Arrangement

Special Situations: Mergers & Acquisitions

Clinical staff care about their service; it is not a board game to be picked up or discarded at whim. Nor do patients appreciate being treated like pawns. We need continuous evaluation of change to ensure that quality and cost containment are being achieved.

Clinical staff care about their service; it is not a board game to be picked up or discarded at whim. Nor do patients appreciate being treated like pawns. We need continuous evaluation of change to ensure that quality and cost containment are being achieved.

Harvey D. Personal views: Hospital games. BMJ. 2000;321:713.

85

VENTURES


Special Situations: Mergers & AcquisitionsMedical staff…big unknown

• Influence &/or behavior can make or break merger

What does the physician gain from merger?


VENTURES

Special Situations:Mergers & Acquisitions

Gain• Financially stable

environment…save the hospital?

• Managed care rates PHO

• New facility New technology

• Larger primary care base• Choice of specialists

Loss• Altered mission

Religious vs secularAMC vs community• Open or closed faculty

• New competition • Facility or program

consolidation Travel time

• Connection to CEO/BOT • Governance style• Bylaws protections


VENTURES

Special Situations: Mergers & Acquisitions

• Merger advisory group membershipMerger of equals vs. acquisition

• Study & manage the culture• Early decisions

Merged or separate medical staffsBylaws “hot buttons”• ED call coverage • Board certification• Officers, Chairs, Chiefs

• CommunicationEarly & frequent written & in person RumorsAnticipate naysayers…they may have important things to say


VENTURES

Strategies that Work

What has your organization tried? What has your organization tried?


How effective have you been?How effective have you been?

What has really bombed?What has really bombed?

What do you think are the top 3 alignment strategies? Why?What do you think are the top 3 alignment strategies? Why?

How to Make it Work for You



Conduct a Formal Physician-Hospital Alignment Process

1) Assess the current situation – interviews, surveys, data.2) Process the results and develop recommendations with a Physician

Advisory Group…. but be sure the right physicians are at that table!3) Conduct a retreat to share the results and initial

recommendations with the broader medical staff.4) Develop a formal Physician-Hospital Alignment

Plan outlining the recommended portfolio of strategies.5) Obtain approval of the plan by the MEC and Board.6) Monitor and reevaluate results of the plan and the changing

environment throughout implementation.


Focus on developing a multi-faceted approach

92

10 Things to Do Back at the RanchCreate a physician strategic advisory groupGet physicians, BOT, and Administration together at the right places: planning retreats, governance, quality Form an entity to employ physiciansCreate a recruiting group and do a MSDP with physician input Manage generational issues with medical staff, BOT & execsEstablish a physician liaison programRecruit (or hold onto ☺) the right VPMA/CMODeploy IT/EMR & manage new financial models via PHOSet up meaningful educational & social interactions for medical staffDevelop future leadership


Thoughts for the Future


Who will be the physician leaders of medical staff & BOT? Who will be the physician leaders of medical staff & BOT?

How will hospitals afford employed physicians?How will hospitals afford employed physicians?

Will medical staff of the future look anything like today’s?Will medical staff of the future look anything like today’s?

• Will physician board members need to be employees?• Will physicians become the CEOs & BOT leaders? • How will we approach leadership development for the next generation?

• What impact will employed physician model have on governance?

• Will joint hospital & medical group contracting increase revenue?• Will risk models return?

Making it Work for You


How ready is your organization to implement these strategies? How ready is your organization to implement these strategies?

What are the major opportunities and barriers to implementation?What are the major opportunities and barriers to implementation?

What do you think the impact of the economic crisis and/or new administration will have on implementing alignment strategies?

What do you think the impact of the economic crisis and/or new administration will have on implementing alignment strategies?

Amy MacNulty Amy MacNulty is a Senior Principal and Northeast Region Manager for the Noblis Center for Health Innovation, a leading advisory group to health providers. With over 20 years of healthcare experience in strategic planning, physician strategies and regulatory servicesplanning, she is a recognized leader in developing and implementing strategic and physician-hospital alignment plans.

In 2006, MacNulty co-authored Strategies for Physician-Hospital Alignment: A National Study sponsored by AHA’s Society for Healthcare Strategy and Market Development. She is also the co-editor of Noblis’ Journal for the Center for Health Innovation, Horizons. MacNulty holds a MA in Business Administration from Northeastern University.

Amy MacNulty is a Senior Principal and Northeast Region Manager for the Noblis Center for Health Innovation, a leading advisory group to health providers. With over 20 years of healthcare experience in strategic planning, physician strategies and regulatory servicesplanning, she is a recognized leader in developing and implementing strategic and physician-hospital alignment plans.

In 2006, MacNulty co-authored Strategies for Physician-Hospital Alignment: A National Study sponsored by AHA’s Society for Healthcare Strategy and Market Development. She is also the co-editor of Noblis’ Journal for the Center for Health Innovation, Horizons. MacNulty holds a MA in Business Administration from Northeastern University.


Joel J. Reich, MD, FACEPJoel J. Reich is the Senior Vice President for Medical Affairs for Eastern Connecticut Health Network (ECHN). Previously, he servedas ECHN’s Chair/Senior Medical Director of the Department of Emergency and Ambulatory Care Services.

Dr. Reich serves on the boards of the Connecticut Hospital Association, NCC-EMS Council, ECHN Health Services (multispecialty group practice), CHIC (captive insurance company), and Ambulance Service of Manchester, Inc. He holds a BA from Brandeis University, a MA from The Sever Institute of WashingtonUniversity, MD from SUNY at Buffalo, and MMM from Carnegie Mellon University. He completed his emergency medicine residencyat Georgetown University Hospital.

Joel J. Reich is the Senior Vice President for Medical Affairs for Eastern Connecticut Health Network (ECHN). Previously, he servedas ECHN’s Chair/Senior Medical Director of the Department of Emergency and Ambulatory Care Services.

Dr. Reich serves on the boards of the Connecticut Hospital Association, NCC-EMS Council, ECHN Health Services (multispecialty group practice), CHIC (captive insurance company), and Ambulance Service of Manchester, Inc. He holds a BA from Brandeis University, a MA from The Sever Institute of WashingtonUniversity, MD from SUNY at Buffalo, and MMM from Carnegie Mellon University. He completed his emergency medicine residencyat Georgetown University Hospital.


ContactsAmy MacNultySenior Principal

Noblis Center for Health Innovation1050 Waltham StreetLexington, MA 02421

781-482-4072 office781-863-5657 fax

[email protected]

Joel J. Reich, MD, FACEPSr Vice President for Medical Affairs

Eastern Connecticut Health Network71 Haynes Street Manchester, CT 06040

860-647-6866 office860-647-6476 fax

[email protected]


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The Dynamic State of Physician-Hospital Alignment: Using Collaboration and Strategy to Drive Success

Health & Medicine

captive insurance company

leading advisory group

hold leaderships feet

national study sponsored

multispecialty group practice

georgetown university hospital

hospital alignment plans

ambulatory care services