At the Becker's Hospital Review Annual Meeting in Chicago on May 17, Ronald Vance, managing director of Navigant, and Michele M. Molden, executive vice president and chief transformation officer of Atlanta-based Piedmont Healthcare, discussed the implications of hospital-physician alignment for profit and performance.
Mr. Vance said the key issue hospitals and health systems need to focus on to continue to be financially strong in the new era of healthcare is hospital-physician alignment. He said this issue will remain central to these organizations' performance regardless of the Supreme Court's decision on healthcare reform. "Do not be overly distracted by [the Patient Protection and Affordable Care Act," he said. Instead, hospitals should focus efforts on partnering with physicians to be able to succeed in a pay-for-performance model. Hospitals need to clearly communicate their expectations for meeting quality metrics to the physicians and establish consequences for failing to meet them. Mr. Vance said a "small carrot and a big stick" may be the future payment model because the financial incentives for achieving performance goals is not that high whereas the financial penalties are great. "If you don't put minimum work standards [in the contract], you can't count on the future generation of physicians to chase these carrots," he said.
Piedmont Healthcare
Ms. Molden said physician alignment and integration has become the organizing principle of Piedmont Healthcare. She shared the example of the Piedmont Heart Institute, which brought together three cardiovascular groups who became responsible for outpatient and inpatient cardiovascular care. Giving the physicians this level of responsibility in the early stages of alignment was part of the health system's strategy of disruptive innovation. "It was like throwing a grenade into the organization," Ms. Molden said, because physicians were given management roles they had no previous experience with. This approach proved successful, however, as the physicians created a patient-centric model of care and improved patient safety by standardizing clinical practice.
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Mr. Vance said the key issue hospitals and health systems need to focus on to continue to be financially strong in the new era of healthcare is hospital-physician alignment. He said this issue will remain central to these organizations' performance regardless of the Supreme Court's decision on healthcare reform. "Do not be overly distracted by [the Patient Protection and Affordable Care Act," he said. Instead, hospitals should focus efforts on partnering with physicians to be able to succeed in a pay-for-performance model. Hospitals need to clearly communicate their expectations for meeting quality metrics to the physicians and establish consequences for failing to meet them. Mr. Vance said a "small carrot and a big stick" may be the future payment model because the financial incentives for achieving performance goals is not that high whereas the financial penalties are great. "If you don't put minimum work standards [in the contract], you can't count on the future generation of physicians to chase these carrots," he said.
Piedmont Healthcare
Ms. Molden said physician alignment and integration has become the organizing principle of Piedmont Healthcare. She shared the example of the Piedmont Heart Institute, which brought together three cardiovascular groups who became responsible for outpatient and inpatient cardiovascular care. Giving the physicians this level of responsibility in the early stages of alignment was part of the health system's strategy of disruptive innovation. "It was like throwing a grenade into the organization," Ms. Molden said, because physicians were given management roles they had no previous experience with. This approach proved successful, however, as the physicians created a patient-centric model of care and improved patient safety by standardizing clinical practice.
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