Hospitals and physicians are preparing to survive in an environment that holds them more accountable for the quality of care they provide; however, throughout the transition providers must also focus on current operations embedded in volume-based incentives.
In this new environment stacked with competing motives, proactive hospitals are seeking opportunities to improve patient care, align incentives and drive cost savings.
In an Oct. 19 physician panel hosted by Navigant, Mark Shields, MD, former senior medical director at Rolling Meadows, Ill.-based Advocate Physician Partners; Charles Kelly, MD, former CEO of Detroit-based Henry Ford Physician Network; and Christopher Stanley, MD, former system vice president of population health at Englewood, Colo.-based Catholic Health Initiatives and current Navigant director, discussed how to successfully align hospital-physician incentives and manage risk.
Here are three ways hospitals and physicians can survive, and excel, in the hybrid world between fee-for-service and value-based care.
1. Drive out the fear of entering into new contracts. Single-signature and downside risk contracts are new to physicians. Therefore, it is important for hospital and physician group leaders to spend time explaining the contracts' intricacies to avoid misunderstandings and dissolve hesitancy to change.
In single-signature contracts, multiple physicians or physician groups are legally joined — generally in a clinically integrated network or ACO — which allows the CIN or ACO to make contract decisions on behalf of all participants.
Dr. Kelly recalled his experience leading the change to a CIN and this new method of contracting at Henry Ford. Most physicians were afraid entering into a single-signature contract with a CIN would "take away [their] existing contract or [they weren't] going to be able to pursue other opportunities outside the network … and that's not true. So we took time to drive out that fear," Dr. Kelly said.
In addition, Dr. Shields explained during the transition to downside-risk contracts it is important to drive out fear among physicians by highlighting achievable quality objectives that will present opportunities, rather than focusing solely on at-risk compensation.
"You don't want to phrase it as, 'Doctor I'm giving you downside risk' … You want to drill down to that specialty metric that will drive success. For example, for primary care doctors you can have metrics of readmissions … those kinds of things will drive success in a risk-based world, without saying, 'Well here, doctor, half of your compensation is at risk for our goal,'" Dr. Shields added.
2. Establish a CIN. A recent Bain and Co. survey found more than 70 percent of physicians prefer a fee-for-service model as opposed to value-based models.
"There are a lot of reasons why fee-for-service will stick around, it's easy to do. We have mechanisms in place. So we have to learn to live in this world with one foot on the dock and one foot on the boat," Dr. Shields said.
The experts agreed one vehicle to successfully navigate this liminal space is a CIN. There are at least three reasons why CINs better steer hospitals' efforts to improve quality and efficiency, Dr. Shields said.
First, CINs allow providers to work together "across specialties to drive change," he said. "Second, the metrics, the level of transparency [is] driven by physicians. And that's very different than getting a report card from the insurance company or the health system." Finally, "the flexibility of designing incentives is much greater in a CIN network than really any other system of physician incentives."
The panelists agreed CINs' focus on cost efficiency will simultaneously feed physicians' desire to improve patient outcomes.
Dr. Shields spoke about his own experience at Advocate, where leaders tracked 4,000 physicians' performance across all chapters. During Advocate's third year under a mixture of risk and pay-for-performance models, one physician chapter in the network began losing money under a risk-based contract. As a result, they were required to present a corrective action plan to the chapter's board.
"They were embarrassed and very anxious," Dr Shields recalled, but in the eight years since the meeting, "never again did any of the chapters fail under a risk program. It's a powerful peer pressure."
3. Appoint physician champions to drive transitions. Physician engagement is imperative to aligning physician and hospital incentives to drive cost savings, quality metrics and patient safety. The secret to engagement, according to these experts, is finding physicians who believe in clinical integration and handpicking them to lead the way.
"Successful organizations usually have one or two physician champions that are really the secret sauce of physician engagement," Dr. Stanley said.
Physician champions — leaders who coordinate objectives and improvement efforts between fellow clinicians and administrators — can improve alignment for various reasons, according to the experts.
"Physicians respond to physicians … when they see the message coming from their peers, with whom they respect as opposed to this new [person] talking new language about advancements in clinical integration, things go farther," Dr. Kelly said.
Dr. Shields added, "[The CIN] needs to be physician-led, professionally managed. Identify physician leaders that buy into the concept, work together across specialties [and] support [the leaders] with training and governance."
The experts concur successful CINs engage physicians across all specialties when deciding various objectives and improvement measures. When physicians know these objectives are beneficial for all specialties, they are more likely to be on board with the change.
Overall, the transition to value-based care is not an overnight process; however, it can start with explaining to avoid misconceptions, engaging physicians in CINs and aligning incentives to nurture a value-based culture.
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