Recently I have been consulting with a large specialty practice in the Midwest that is being purchased by the regional medical center where the physicians admit most of their patients. Both parties, the physicians and the medical center, do not understand the other parties motives for entering into this new relationship and thus, are jeopardizing the success of the new venture. Before I show how executive business coaching can be beneficial in this situation, let’s take a look at why physician-hospital relationships are changing.
Earlier blogs have discussed how the passage of the Affordable Care Act is transforming payment for patient care from a fee-for-service model to one of value-based purchasing. It is this change in payment models that is altering the financial relationship between physicians and hospitals.
To remain financially viable, medical centers realizing the change in payment models are attempting to control the providers of care: physicians. There are two primary methods in which hospitals are employing physicians to control patient outcome success. The first method is to simply have physicians become full-time employees of the hospital. The physician is either hired away from his or her private practice or begins to work for the hospital upon completion of their training. The physician is paid a salary and benefits with an incentive bonus often based on number of relative value units billed (RVU’s) and/or patient satisfaction.
The second method in which hospitals employ physicians is by buying an existing private practice. Typically, the private practice is a large specialty “feeder” practice for the hospital (like the one I am advising); a speciality whose patients utilize many of the hospitals’s more expensive services, such as cardiology, neurosurgery or orthopedics. This method, as mentioned earlier, is more difficult to structure and not always successful as physician and hospital motives are not aligned. The physician motive in becoming a hospital employee is to gain financial security in this uncertain era of healthcare reform and to maintain or even increase earnings. Hospitals, by buying the practice and employing the physician, are hoping to gain financial security by controlling the physician referral patterns as well as sharing the financial risk of patient outcome success with the physician.
Back to the large Midwest specialty practice in which, by following a logical step-by-step progression, I have successfully used business coaching to align physician and hospitals. The first step is to have the physicians and the medical center define and refine exactly what are their motives or “drivers” for entering into this new business model. To have the greatest chance for success, they need to know exactly what they want from the relationship. With larger physician practices, 14 partners in this case, it is particularly important to seek common alignment of all the partners. The second step is to have both the physician and the medical center leaders approach the relationship from the other party’s perspective. This is more difficult than it appears, requiring a great deal of healthcare business acumen, experienced active listening and insightful questions. Questions for physicians are, “Why would the medical center guarantee your salary?” or “What security is the medical center gaining?” Questions for the medical center are, “Exactly what securities are the physicians gaining in this relationship?” or “Why would they want to take on financial risk?”
The third step is when the fun begins, as the leaders of both parties are brought together and undergo coaching as a team. Importantly, early in the team coaching process, the team establishes a team charter or “rules of the game” that they will play by as they successfully define their new relationship. The team then develops, implements and refines a game plan to accomplish the goal of successfully joining together. The partnering process learned and modeled during the team coaching process will become a second language and road map to ensure the continued success of the physician-hospital relationship moving into the future.