A physician’s impact on financial operations, patient care and an organization’s culture make physician alignment critical for any healthcare organization to succeed.
The current changes in reimbursement and care delivery models, along with increased physician burn out make it a critical time to reevaluate your physician strategy. Healthcare leaders should consider the following initiatives to maximize their physician partnerships.
#1 - Optimize Reimbursement
Physicians can impact reimbursement at the hospital or health system level, in addition to their individual practice. New risk-based reimbursement models are providing opportunities for significant increases if an organization can master lowering costs while maintaining quality, and physician participation is instrumental to success. Therefore, it is important to think about your physician arrangements when reviewing your risk-based contracts and other physician agreements with payors. Specifically, leaders should consider implementing contractual arrangements that align physicians with the specific value-based goals included in payor contracts, such as relevant quality metrics and adherence to care coordination processes. Lastly, this may be an opportune time to renegotiate commercial contracts with value-based goals in mind. VMG Health, a valuation and strategic advisory firm, has observed a new focus on payor contract analysis, including a fresh look at hospital-based medicine arrangements.
#2 - Update Physician Compensation Models
Major recent reimbursement changes are making it essential to update contractual arrangements with physicians. Both the changes to the 2021 Medicare Physician Fee Schedule’s (2021 MPFS) focus on primary care, and the value-based care movement significantly impact reimbursement and should be considered as healthcare organizations develop their compensation models with physicians. The potential impact of the 2021 MPFS is so major that a recent VMG Health analysis demonstrated a 2019 compensation model resulted in a family medicine physician realizing a 15.7% increase in compensation in 2021, with no increase in work effort. As a result, many organizations are considering changes that more proportionally recognize primary care and other cognitive specialties. Further, VMG Health is seeing organizations place more emphasis on quality, patient experience, patient access, and other value-based metrics within the provider compensation structure, and less on WRVU-based productivity.
#3 - Lower Physician Burnout
Successfully working with physicians requires understanding their current challenges. An ongoing and often overlooked issue is physician burnout. In 2018, The Physicians Foundation reported 40% of physicians as having burnout compared to 58% in 2020, both incredibly high numbers. Thankfully, two strategies have emerged to help lower physician burnout: the emergence of telehealth and provider wellness programs. A Deloitte study indicated that physicians believed technologies, such as telehealth, assisting with more day-to-day clinical workflow had the potential to “save significant time and resources, while 49% said they could increase job satisfaction.” Another new approach that is gaining steam to lower burnout is the establishment of employee wellness programs, led by an expert in addressing healthcare professionals’ well-being, such as a chief wellness officer. In addition, many health systems are investing in leadership roles for physicians. Physicians in leadership positions can offer input and pre-emptively address issues before they arise in the daily work of clinician providers. MGMA reported that 77% of healthcare leaders use a dyadic team model, where authority is shared between an administrator and a physician. Implementing these strategies will demonstrate to your physician partners that you are working towards a solution to lower burnout and are invested in their well-being.
For a more in-depth analysis of the insight above and much more, download VMG Health’s full 2021 PATT.