How to engage physicians without spending more
The rise of accountable care organizations and related value-based purchasing agreements mark an historic shift in the way healthcare is organized, delivered and paid for in the United States.
Rewarding hospitals and physicians for improving quality and reducing expense creates perhaps the best opportunity for bending the unsustainable cost curve of traditional fee-for-service care. At the same time, evidence-based guidelines and standards offer hope for significantly improving the quality and continuity of care. 
Only time will tell how successful value-based purchasing can be in achieving these goals. But one fact is clear: No transformation of healthcare will ever occur without the sustained commitment of the physician. As the hands-on provider of care, the physician is the fulcrum for any strategy designed to eliminate unnecessary or redundant care, improve care coordination or oversee patient engagement.
Achieving the ACO's potential consequently depends on ensuring that physicians embrace the new care model. Physicians must understand how value-based care works. They must receive the resources needed to restructure the way they practice medicine. And they must be willing to adjust their attitudes and beliefs to embrace a team care approach.
Given physicians' inherent independence, this isn't an easy task. But the good news is that most are enthusiastic about the focus on quality and patient satisfaction at the heart of the ACO model. The task for hospitals, payers and other ACO developers, then, is to harness that enthusiasm by eliminating barriers to physician engagement.
Recent studies suggest that an understanding of group dynamics, physician realities and basic human behavior all are essential in tailoring viable engagement strategies. More specifically, evidence shows that an overreliance on employment and compensation schemes as levers for stimulating engagement misses more effective, broad-based approaches.
The expanding ACO universe
Finding ways to get physicians on board with the ACO concept is no longer a theoretical exercise for many organizations, given the rapid growth of the value-based care. In January 2014, the total number of public and private-sector ACOs reached 606, up by more than 200 from a year earlier.1 ACO covered lives over the same period jumped 34 percent, from 13.6 million to 18.2 million.2
Although the CMS blazed the ACO trail with its Pioneer and Shared Savings programs, it is commercial payers who today are taking the lead with a range of value-based contracts, entities and mechanisms. At a recent national symposium on accountable care in Washington, D.C., representatives from major insurers told participants that they expected the majority of their provider payments would be made through some type of value-based contract within the next three-to-five years.3
Understanding group dynamics
What, then, can organizations do to help physicians embrace this new concept?
For starters, relationship-building, two-way communication and participatory decision-making are essential, according to a recent study that examined successful engagement strategies at four emerging ACOs nationwide.
Published this year in the Journal of Health Organization and Management, the paper's primary conclusion was that effective engagement strategies depend to a large extent on a nuanced understanding of group inter-dynamics, or the so-called social identities of the physician organizations involved.4 In simplest terms, that means ACO leaders should either emphasize or downplay a physician practice's relationship to the whole, depending on the level of independence the group perceives for itself.
Money isn't everything
Another recent report found that while financial incentives are clearly important in motivating physician behavior, they represent only part of the solution. The study, titled "Engaging Physicians to Transform Operational and Clinical Performance," was produced by McKinsey in 2013 and based on a survey of more than 1,400 physicians from a range of specialties nationwide.5
According to the report, four major roadblocks impede physician engagement in performance transformation:
- Physicians frequently feel overwhelmed and ill-equipped to accommodate or implement change. They also seem to have only a narrow understanding of how their behavior contributes to waste and inefficiency.
- The emphasis by hospitals and payers on employing physicians as a primary means of securing engagement ignores more effective holistic strategies that combine multiple alignment approaches.
- Similarly, most physician employers are overly dependent on compensation as a mechanism for influencing physician behavior.
- Finally, physicians' limited understanding of risk-based payment models, coupled with their inherent risk aversion, is constraining acceptance of these approaches and hindering the potential for expanding higher-value care.
Noting the reliance on physician employment as a means of increasing engagement, the study asserts that "health systems and health plans should develop a true capacity in physician engagement, which is much broader than, and does not necessarily include, employment."
"Employing physicians is very costly, often fails to deliver the intended value and is not crucial to achieving physician engagement," the report continues. Instead, it says, how physicians are engaged is more important in driving change than any contractual mechanism.
Changing human behavior
The McKinsey study further identifies four key findings from behavioral science that have direct bearing on eliciting physician change. First, individuals are more inclined to alter their behavior if they clearly understand the reason for the change and agree with the rationale.
"Thus, a health system that wants to embark on a change program must develop a compelling explanation, grounded in clinical evidence, for what the proposed changes will accomplish," the report states.
Second, humans are more likely to accept and participate in change if they see individuals they respect adopt new behaviors. Role models and champions, therefore, are essential to ACO success.
"The successes these leaders achieve should be publicized so that their colleagues can appreciate the impact the program is producing," the report states.
Third, physicians must be equipped with the necessary skill sets to accomplish what is demanded of them. The McKinsey survey revealed that many physicians have only limited insight into how their day-to-day clinical decisions translate into inefficiency in care delivery. Nor are they clear about how the mechanisms of risk-based care work. To their credit, most physicians recognize the need for help in these areas: In the survey, training and resources ranked second only to compensation as a factor that would influence behavioral change.
Lastly, in order for change to take hold and be sustainable, "it is crucial that surrounding structures reinforce the alterations in clinical behavior physicians are being asked to make." This includes not only compensation and training, but also information systems that can support evidence-based care, aligned incentives and governance arrangements.
The report concludes that while physicians generally recognize the need to change and express a high willingness to do so, they do not have the resources or capabilities to accomplish what is required on their own. Health systems and payers must therefore guide and support physicians in preparing for the future, something that can best be accomplished by understanding "how physicians view the world and what motivates their behavior."
The heart of the profession
In these early stages of the value-based revolution, the necessity of engaging with new ideas about care delivery has yet to reach top-of-mind for many clinicians. For most, it is simply a question of bandwidth: The challenges and complexities of sustaining a practice in the present leave little room to think about the future.
Yet as the number of ACOs continues to grow and the model achieves critical mass, physicians will increasingly be compelled to get involved. As a result, the market will serve as the ultimate engagement mechanism, albeit an unforgiving one: Those who are unwilling or unable to adapt will be left behind as payers seek out physicians who understand how to improve quality while lowering cost.
Fortunately, the emphasis on quality at the core of value-based care is what many physicians have been hoping for. It is therefore quite possible that given the right resources and encouragement, physicians could eventually emerge as the biggest backers of value-based care.
"We have long lamented [the fee-for-service] system, and pined for a model that would favor value over volume — one in which our wisdom, critical thinking, caring and compassion held the same worth as procedures and numbers," wrote Carla Rotering, MD, a pulmonologist at Banner Thunderbird Medical Center in Phoenix, in 2012.6
"…Now, for the first time in our history — in the value-based purchasing model — the quality of the relationship we create with patients has been elevated. We know that now the experience we choose to create with our patients also will be reflected in our reimbursement." The patient experience, Dr. Rotering said, "is the heart and art of our profession. This is our humanity."
John Wallace is vice president and general manager of ACO services, McKesson Business Performance Services in Alpharetta, Ga. He has more than 16 years of experience in healthcare IT sales leadership, business development and general management. He can be reached at john.wallace@mckesson.com.
1 David Muhlestein, “Accountable Care Growth in 2014: A Look Ahead,” Health Affairs Blog, Jan. 29, 2014, http://healthaffairs.org/blog/2014/01/29/accountable-care-growth-in-2014-a-look-ahead/
2 Ibid.
3 “Value-Based Payments, Narrow Networks Are on Rise, Insurers Say,” ACO Business News, Volume 5, No. 7, July 2014, http://aishealth.com/sites/all/files/marketplace_pdf_samples/sampleabn.pdf
4 Sara A. Kreindler, et al, “The rules of engagement: physician engagement strategies in intergroup contexts,” Journal of Health Organization and Management, Volume 28, No. 1, June 2014, pp. 41-61
5 Pooja Kumar, MD; Anna Sherwood; and Saumya Sutaria, MD, “Engaging physicians to transform operational and clinical performance,” McKinsey, May 2013, file:///C:/Users/Base/Downloads/MCK_Hosp_MDSurvey%20(1).pdf
6 Karen Cheung-Larivee, “Value-based purchasing is good news for physicians,” Fierce Healthcare, December 6, 2012, http://www.fiercehealthcare.com/story/value-based-purchasing-good-news-physicians/2012-12-06