Bruce Crowther, president and CEO of 431-bed Northwest Community Hospital in Arlington Heights, Ill., makes seven points about switching from the old model of the entrepreneurial physician to the new model of physician integration.
1. Decline of the entrepreneurial physician. Mr. Crowther, who has headed Northwest Community for 21 years, used to purposely recruit physicians who wanted to be independent. "We wanted high-energy physicians interested in entrepreneurship," he recalls. Physicians on-staff set up ancillary businesses, such as adding office-based procedures, which supplemented declining reimbursements. "This approach served us extremely well for many years," he says, but the approach fell apart in many specialties when Medicare lowered payments for office-based procedures. So Mr. Crowther decided to completely rethink the hospital's approach, based on the evolving needs of the health system, hospitals and physicians.
2. Rise of coordinated care and the team approach. "The healthcare delivery system is fragmented, and there is tremendous value to hospitals working more collaboratively with physicians," Mr. Crowther says. "With a team approach, we’ll be more successful at improving the patient experience and making healthcare more affordable." This approach will result in simplified, coordinated care, improved quality and better access to diagnostic imaging, lab and immediate care services. Northwest Community, a stand-alone hospital with several competitors in the area, is forming closer relationships with its physicians through employment and other models.
3. Migration of practices to hospitals. Even larger practices are linking up with hospitals. In Sept. 2010, Northwest Community took over Affinity Healthcare, the largest practice on staff at the hospital, with 42 physicians and clinicians in primary care. Like most physicians on staff at Northwest Community, Affinity physicians have had privileges at other hospitals in the area, and some Affinity physicians will continue to have privileges at Advocate Lutheran General Hospital. Affinity has been growing since the merger was announced, taking on a few more physicians.
4. Greater use of payment incentives. Learning from the poor incentive programs of the 1990s, hospitals have moved to productivity-based models with bonuses, which can help align employed physicians. Compensation for employed physicians at Northwest Community is based on productivity, through an RVU-based system. They are then eligible for bonuses of up to 20 percent of base pay, which is the same metric for the hospital's executive team. The employee has to meet an earnings threshold, based on costs, quality, patient satisfaction and growth. "The leveraging effect of our team alignment is just amazing," Mr. Crowther says.
5. More governance roles for physicians. In addition to employment, Northwest Community is teaming up with its physicians by giving them a more prominent role in its governance structure. Physicians wanted to have a say in operational decisions, so Northwest Community set up a joint operating committee, with six management people and six physicians, chaired by Mr. Crowther, meeting three times a month. The committee discusses quality and patient satisfaction. The doctors become committed to influencing those numbers. "It’s a refreshing form of alignment," Mr. Crowther says.
6. Linking up with practices through EHR. Physician integration very much depends on meaningful data provided by Healthcare IT systems, so it is important to link up with physicians' practices. Northwest Community has had an EHR system since 2004 and Affinity Health has its own system, which will be fully connected with the Northwest Community system by January. The next step for the hospital is to connect with other EMR systems of private practices on staff.
7. Coordinated payment arrangements. Participating in partnerships with payors is another way hospitals can start to align with physicians. Northwest Community is starting a patient-centered medical home pilot project with Blue Cross Blue Shield of Illinois that starts on Jan. 1. Although it is limited to primary care physicians, it will have a leveraging effect on all physicians on staff, including specialists. For example, the primary care physicians will be managing referrals to specialists.
Learn more about Northwest Community Hospital.
1. Decline of the entrepreneurial physician. Mr. Crowther, who has headed Northwest Community for 21 years, used to purposely recruit physicians who wanted to be independent. "We wanted high-energy physicians interested in entrepreneurship," he recalls. Physicians on-staff set up ancillary businesses, such as adding office-based procedures, which supplemented declining reimbursements. "This approach served us extremely well for many years," he says, but the approach fell apart in many specialties when Medicare lowered payments for office-based procedures. So Mr. Crowther decided to completely rethink the hospital's approach, based on the evolving needs of the health system, hospitals and physicians.
2. Rise of coordinated care and the team approach. "The healthcare delivery system is fragmented, and there is tremendous value to hospitals working more collaboratively with physicians," Mr. Crowther says. "With a team approach, we’ll be more successful at improving the patient experience and making healthcare more affordable." This approach will result in simplified, coordinated care, improved quality and better access to diagnostic imaging, lab and immediate care services. Northwest Community, a stand-alone hospital with several competitors in the area, is forming closer relationships with its physicians through employment and other models.
3. Migration of practices to hospitals. Even larger practices are linking up with hospitals. In Sept. 2010, Northwest Community took over Affinity Healthcare, the largest practice on staff at the hospital, with 42 physicians and clinicians in primary care. Like most physicians on staff at Northwest Community, Affinity physicians have had privileges at other hospitals in the area, and some Affinity physicians will continue to have privileges at Advocate Lutheran General Hospital. Affinity has been growing since the merger was announced, taking on a few more physicians.
4. Greater use of payment incentives. Learning from the poor incentive programs of the 1990s, hospitals have moved to productivity-based models with bonuses, which can help align employed physicians. Compensation for employed physicians at Northwest Community is based on productivity, through an RVU-based system. They are then eligible for bonuses of up to 20 percent of base pay, which is the same metric for the hospital's executive team. The employee has to meet an earnings threshold, based on costs, quality, patient satisfaction and growth. "The leveraging effect of our team alignment is just amazing," Mr. Crowther says.
5. More governance roles for physicians. In addition to employment, Northwest Community is teaming up with its physicians by giving them a more prominent role in its governance structure. Physicians wanted to have a say in operational decisions, so Northwest Community set up a joint operating committee, with six management people and six physicians, chaired by Mr. Crowther, meeting three times a month. The committee discusses quality and patient satisfaction. The doctors become committed to influencing those numbers. "It’s a refreshing form of alignment," Mr. Crowther says.
6. Linking up with practices through EHR. Physician integration very much depends on meaningful data provided by Healthcare IT systems, so it is important to link up with physicians' practices. Northwest Community has had an EHR system since 2004 and Affinity Health has its own system, which will be fully connected with the Northwest Community system by January. The next step for the hospital is to connect with other EMR systems of private practices on staff.
7. Coordinated payment arrangements. Participating in partnerships with payors is another way hospitals can start to align with physicians. Northwest Community is starting a patient-centered medical home pilot project with Blue Cross Blue Shield of Illinois that starts on Jan. 1. Although it is limited to primary care physicians, it will have a leveraging effect on all physicians on staff, including specialists. For example, the primary care physicians will be managing referrals to specialists.
Learn more about Northwest Community Hospital.