1. Recognize key drivers of alignment 2. Create a physician alignment plan 3. Lessons Learned

1. The Dynamic State of
Physician-Hospital Alignment:
Using Collaboration and Strategy to Drive Success
Amy S. MacNulty
Noblis Center for Health Innovation
Joel J. Reich, MD, FACEP
Eastern Connecticut Health Network
1
American College of Healthcare Executives

2. “Triumph of
HOPE
over
EXPERIENCE”
Samuel Johnson, 1791
Samuel Johnson, 1791
2
American College of Healthcare Executives

3. Learning Objectives
1 Recognize key drivers of alignment.
2 Create a physician alignment plan.
3 Share “lessons learned”.
3
American College of Healthcare Executives

4. Agenda for Today
Imperative for Alignment
• Transformation of Health Care Industry
• The Mood of Medicine
Strategies that Work
• Key Findings of National and ACPE Study
• Alignment Model – How Effective is Your Organization?
How to Make it Work for You
4
American College of Healthcare Executives

5. Imperative for Alignment
5
American College of Healthcare Executives

6. The Path to Alignment
• To work together, especially in a joint intellectual
Collaboration
effort. (or, To cooperate treasonably, as with an
enemy occupation force in one's country.)
• A promise or pledge. (or, A hostile meeting of
Engagement
opposing military forces in the course of a war)
• A state of agreement or cooperation among
Alignment
persons, groups, nations, etc., with a common
cause or viewpoint.
Getting to a truly shared goal
6
American College of Healthcare Executives

7. What’s Going on Out There?
Patients, physicians, hospitals & government agree on one thing:
UNHAPPINESS
Demand & Access
•
Quality, Safety & Service
•
Financial viability
•
Health reform
•
Coverage expansion
•
Cost control
•
Medical home
•
Pay for performance
•
7
American College of Healthcare Executives

8. Transformation of Health Care Industry
Research Consumer Industry Technology
Trends* Trends Trends Trends
• Expansion of • The “Responsive • Strained Access to • Electronic Medical
Telemedicine and Customer” and Capital and Tax Records/CPOE
Robotics Medical Tourism Exempt Scrutiny • Expansion of Point of
• Regenerative • Growing Incidence of • Increased Stress on Care Testing
Medicine Obesity the Workforce • Wireless
• Restorative Medicine • Access to In Home • Physician/Hospital Communication
Therapies and Easy Relationships and Devices
• Stem Cell Research
Access to Medical Medical Homes • Home Health
Care • Regional Data Remote Monitoring
• Access to Online Sharing and Expansion of
Medical Records RFID Technology
Source:* Piquepaille, R (06/27/08). A Portable Solar-Powered ECG Unit. EmergingTech http://blogs.zdnet.com/emergingtech/?p=992
8
American College of Healthcare Executives

9. Consolidation Among Providers is
Altering Traditional Revenue Sources
Provider Issues Purchaser Issues
Hospitals seeking efficiencies Consumers more aware of price
• •
and quality
Hospitals diversifying, focusing
•
on outpatient and wellness care Baby boomers moving to the
•
Medicare program
Increased emphasis on
•
standardization, integration and Medicare and other payers
•
consolidation of services expecting “value” for payment
Evolving physician/hospital Commercial insurers under
• •
relationships pressure from employers to
reduce cost
Consumers picking up more of the
•
healthcare “tab”
Source: (06/08).Come Down from the Ledge. HealthLeaders. 32-36. Grote, Kurt, Levine, E., & Mango, P. US Hospitals for the 21st Century.
HealthLeaders, Retrieved 08/11/08, from http://www.mckinseyquarterly.com/
9
American College of Healthcare Executives

10. Physician Shortage is a Result of Both
Increasing Demand and Shrinking Supply
Increasing Demand Shrinking Supply
Aging Aging physician
population workforce
Physician
Physician
Shortage
Shortage
Changes in
Growing
practice patterns
population
Education
Longer life
system
spans Need for constraints
Physician
Prevalence of
Workforce
chronic disease
Planning
10
American College of Healthcare Executives

11. Physician Workforce is Aging…
Like the Rest of Us
2007 Merritt Hawkins Survey
Physician
49% of physicians > 51 plan to make a change in
49% of physicians > 51 plan to make a change in
Population is next one to three years
next one to three years
Aging
Plan to retire 14%
Plan to retire 14%
Plan to work on a temporary basis 4%
Plan to work on a temporary basis 4%
47% of physicians
47% of physicians Plan to work part-time 7%
Plan to work part-time 7%
> 50
> 50 Plan to close their practice to new 8%
Plan to close their practice to new 8%
36% of physicians
36% of physicians patients
patients
> 65
> 65 Plan on taking a combination of the 7%
Plan on taking a combination of the 7%
above steps
above steps
Source: 2007 Survey of Physicians 50 to 65 Years of Age, Merritt Hawkins & Associates, 2007
11
American College of Healthcare Executives

12. Physician Workforce
• Shortage: 124,000-159,300 by 2025
Variables: increased utilization, younger
physicians work less hours
• Medical Schools increasing 15%…but physician
supply dependent upon graduate medical
education
Residency grads static for years
• Recruiting very difficult
American Association of Medical Colleges. The Complexities of Physician Supply and Demand Projections Through 2025. 2008.
12
American College of Healthcare Executives

13. The Decline in Physicians’ Real Income
Physicians’ Revenues Have
Not Kept Pace with Expenses
% Increase
1998 – 2008
Multi-specialty Group
Practice Operating
Expenses: 65%
Medicare Payment
Rates: <2%
Source: Health System Change Tracking Report No. 15, “Losing Ground: Physician Income, 1995-2003,” June 2006; Butcher, “Many
Changes in Store as Physicians Become Employees,” Managed Care, July 2008.
13
American College of Healthcare Executives

14. 2005 to 2007 Women represent
46% increase in physicians working part-time 50 percent of US
medical students
% of All Physicians Practicing Part-time
18.1%
17.2%
14.5% 14.5%
14.0%
13.1%
24% of female
8.6%
physicians <50 work
7.6%
part-time
vs.
2% of male
physicians
29 or 30 – 34 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59 60+
less
Age Groups
Top Reason to MEN – Unrelated professional or personal pursuits
Top Reason to
Work Part-time WOMEN – Family responsibilities (including pregnancy)
Work Part-time
Source: 2007 Physician Retention Study, Cejka Search and AMGA; “Will There be Enough Doctors”, HealthLeaders, October 2007.
14
American College of Healthcare Executives

15. Physician labor market
continues to be under
Shortages exist in Significant gap
Aging population will
extreme stress
Who will
many specialties between supply and
alter demand for
care for our demand in 2020 Referrals tough
physician services
patients? to get…
Looming shortage
recruiting takes
of physicians years
State likely to face a
severe shortage over
next 20 years
Likely to face
physician
shortage in 2015
Shortage will continue to
pose major problems
School too small to
meet State’s growing
health care needs All agree demand
outstrips production
Physician to Extant physician
population ratios
Still far below the shortage will
Physician marketplace
increasingly
national average become more
unfavorable needs new physicians
severe
Source: Center for Workforce Studies, Association of American Medical Colleges, August 2007.
15
American College of Healthcare Executives

16. The Mood of Medicine
“But in the days when a successful career was built on a number of
tacitly recognized pillars-outsize pay, long-term security, impressive
schooling and authority over grave matters-doctors and lawyers were
perched atop them all.”
“In a culture that prizes risk and
outsize reward-where
professional heroes are college
dropouts with billion-dollar
websites-some doctors and
lawyers feel that they have
slipped a notch in social-
status, drifting towards the
safe-and-staid realm of dentists
and accountants.” The Falling Down Profession
Source: NY Times, January 6, 2008
16
American College of Healthcare Executives

17. ACHE Top Issues 2007
1. Financial challenges
2. Care for the uninsured
3. Physician Hospital Relations
4. Quality
5. Personnel shortages
6. Patient Safety
7. Governmental mandates
8. Patient satisfaction
9. Capacity
Most top issues dependent upon physician hospital relations.
American College of Healthcare Executives 17

18. ACHE Hospital-Physician Issues:
2006 Survey
• Physician recruitment
• Physician-hospital competition as opposed to
collaboration
• Hospital staff shortages
• ED call coverage payment
• Hospitalists
Personal communication with ACHE 10/08
18
American College of Healthcare Executives

19. Better Together:
Business Case for Alignment
• Patients still follow physicians to hospitals for elective
Growth (profitable) procedures
• Errors & rework costly in human life, suffering, time & dollars
Quality/safety & • Accreditation & licensing depend upon it
utilization • Process Improvement
management Better use of everyone’s precious & costly time
Satisfied patients & staff = business growth
• P4P likely to morph into global payments
Reimbursement
• Joint hospital-physician mco contracting
19
American College of Healthcare Executives

20. Credit Rating “Contemporary” Credit Ratings
“Contemporary” Credit Ratings
Rating Factor
Aa A Baa “BIG”*
Getting value/volume from
Getting value/volume from
Physician Dependency active staff
active staff
% of inpatient annual Less than 11%-39% Greater Focus on specialists
Focus on specialists
admissions contributed by 10% than 40% Integration Strategies
Integration Strategies
top 10 leading physicians − Employment &
− Employment &
Composition Employment Model
Employment Model
− IT
− IT
Diversification of Broad Sufficient Some Deficient
− Access to Joint ventures
− Access to Joint ventures
specialists deficiencies
Medical Group activity in
Medical Group activity in
Degree of physician High Fairly Low Non-existent
market
market
loyalty High
− Strong medical group…risk
− Strong medical group…risk
Competition from active Minimal Low Moderate High of leaving market
of leaving market
staff − Small practices…risk of
− Small practices…risk of
Physician shortages and Limited Sufficient Highly Pervasive losing market
losing market
turnover Fluid Joint Venture philosophy
Joint Venture philosophy
− Half vs. none
− Half vs. none
Recruitment Successful Challenging
Average age 45 50 50-60 60+
Source: Adapted from Standard & Poor’s
Academic and research ACPE Presentation, New York, 4/08
orientation
* Below Investment Grade
Source: Adapted from Moody’s Not-For-Profit Hospitals and Health Systems Outlook, January
2008
20
American College of Healthcare Executives

21. Focus: What strategies are being used to
strengthen physician-hospital alignment,
& which strategies are most effective?
Hospital Perspective Physician Perspective
Healthcare Strategy and Market ACPE survey of 10,000
• •
Development (SHSMD) survey members
of 3,000 members 400+ respondents
•
362 respondents 15 interviews to-date
• •
60+ interviews
•
Source: Noblis/AHA, Strategies for Strengthening Physician-Hospital Alignment: A National Study, 2006; ACPE Member Survey 2008
21
American College of Healthcare Executives

22. ACPE Survey
ACPE Survey
Private practice relationship significantly lower than employed physicians.
Private practice relationship significantly lower than employed physicians.
National 2005 survey (362 responses) ACPE 2008 survey (324 responses)
Hospital relationship with
Hospital Employed
members of the active 41% 52% 7%
47% 36% 17%
staff
Doing very well
Doing very well
Some things are working; others need work
Some things are working; others need work
More serious problems
More serious problems
Hospital relationship with Private Practice Physician
16% 63% 21%
33% 38% 29%
referring physicians (PPP)
(not members of the active
staff)
22
American College of Healthcare Executives

23. Whose Perception is Reality???
Perceptions of Existing Relationships with Active Staff
Percentage Rating “Very Positive”
70%
Similar disconnect
Similar disconnect
between CMO’s and
between CMO’s and
Medical Directors in
Medical Directors in
Noblis 2008 study
Noblis 2008 study
34%
31% 30%
President/CEO Physician Relations Physician Leader Strategic Planner
Source: Noblis/SHSMD (AHA), Strategies for Strengthening Physician-Hospital Alignment: A National Study, 2006
23
American College of Healthcare Executives

24. Imperative for Alignment
Do these trends reflect what you are observing?
• locally?
• regionally?
• nationally?
Are there other trends you think will bring
physicians and hospitals together or pull them
further apart?
24
American College of Healthcare Executives

25. Strategies that Work
25
American College of Healthcare Executives

26. 2005 Noblis National Study Key Findings
Infrastructure
Infrastructure Substantive Physician
Substantive Physician
improvements to
improvements to involvement in leadership
involvement in leadership
increase efficiency/
increase efficiency/
decision making development
decision making development
accessibility of care
accessibility of care
Support for
Support for
High quality/safe
High quality/safe physician practice
physician practice
patient care
patient care growth
growth
Interrelated
Strategies Selective alignment
Selective alignment
Information
Information
of economic
of economic
systems
systems
interests
interests
Visibility/
Visibility/
Communication … Positive
Communication … Positive accessibility of
accessibility of
Openness… organizational
Openness… organizational CEO/Senior
CEO/Senior
Trust…Respect culture
Trust…Respect culture Management
Management
26
American College of Healthcare Executives

27. Noblis’ 2005 Physician-Hospital Alignment Study
• Physicians are going to be either collaborative partners or active competitors.
Key • Decreasing physician reimbursement causing physicians to spend more time in office
and/or competing with the hospital for ancillary services.
Alignment
Findings • Of the 10 most effective strategies, half involved employing physicians.
% Respondents Ranking
as Highly Effective
1) Employ intensivists 75%
2) Employ a vice president of medical affairs (or equivalent leader) 74%
3) Employ hospitalists 74%
4) Provide financial support for recruitment to independent practices 72%
Ten
5) Sponsor retreats limited to physician leadership and senior management 70%
Most
6) Have a formal physician relations program with professional staff responsible for 68%
Effective spending time with active medical staff members and their office staffs in an effort to
Alignment strengthen physician-hospital relationships
Strategies 7) Sponsor planning retreats that include board members, physicians, and senior management 68%
8) Actively involve physicians in planning and developing clinical service lines or centers of 66%
excellence
9) Employ primary care physicians 65%
10) Employ some office-based specialists 64%
27
American College of Healthcare Executives

28. Noblis-ACPE 2008 Survey
• Physician-hospital relations: disconnect at the top
• Physician-Hospital alignment
Provide good service
Improve efficiency/accessibility of care-information systems
& medical staff structure
Make QI/peer review part of the contract for medical
directors, joint ventures
• Leadership & VPMA role
• Physician on BOT and committees
• Medical Staff strategic advisory
groups, planning retreats
28
American College of Healthcare Executives

29. Alignment Model
Strategic initiative
Multiple parallel strategies & tactics
Balance in key areas
29
American College of Healthcare Executives

30. 30
American College of Healthcare Executives

31. Physician-Hospital Alignment
Critical Success Factors
Medical staff leadership
Specific strategic goals & tactics
Communication
Strategic metrics
ROI difficult to measure
31
American College of Healthcare Executives

32. Physician-Hospital Alignment
Strategic Plan Metrics
• Joint ventures
• Active staff size
• ED call coverage
• Average age
• Physician loyalty
• % of admits by top 10%
Splitters
• MSDP fulfillment
• Physician leadership
Recruitment goals
• Physician liaison visits
American College of Healthcare Executives 32

33. American College of Healthcare Executives 33

34. Relationships
Formal & informal leaders
Who is the
medical Governance style
staff? How do they get along with each other?
Who are
How do you get along with them?
you?
Relationships are time & energy intensive but not
RELATIONSHIPS
capital intensive strategies!
American College of Healthcare Executives 34

35. What About this Autonomy Thing?
Unique Highly Specialized Profession
Autonomy: “Independence of action.” *
Should we mourn or rejoice?
A return to patient care
RELATIONSHIPS
*Society for General and Internal Medicine Study Group
American College of Healthcare Executives 35

36. So…What Makes Physicians
Really Unhappy?
• Lifestyle
Work schedule
Call
Patient care: quality & service
•
Relationship with patients and colleagues
•
Administrative aspects of practice
•
Income
•
Future
•
Dissatisfied physicians leave medicine at a
RELATIONSHIPS
rate of 2-3 x satisfied ones
American College of Healthcare Executives 36

37. 2008 Noblis-ACPE Study:
What are the most important activities that strengthen
hospital-physician relationships?
Listen, communicate, engage, dialogue, obtain input, e.g. survey
Listen, communicate, engage, dialogue, obtain input, e.g. survey
Decision making, involve in leadership activities/development
Decision making, involve in leadership activities/development
Treat as partner, collaborator
Treat as partner, collaborator
Improve efficiency, operations, productivity
Improve efficiency, operations, productivity
Address data & IT, EMR
Address data & IT, EMR
Honesty, respect, trust, transparency
Honesty, respect, trust, transparency
Financial support, joint ventures, align incentives
Financial support, joint ventures, align incentives
RELATIONSHIPS
American College of Healthcare Executives 37

38. Generational Profile
Generations predict values & behavior
Generations in active practice
Baby Boomers 1946-1964
Generation X 1965-1977
Generation Y 1978-1986
Private practice identity
•
Employed MDs are slackers…
Baby Weathered tough storms: Medicare, Managed Care, Malpractice Crisis
•
Boomers Resent that “everything” is given to employed physicians
Succession Planning
•
Practice FMV may lead to acquisition & employment
Gen X & RELATIONSHIPS
Medicine is a profession…not a lifestyle
•
Gen Y
American College of Healthcare Executives 38

39. Generational Clashes
Tensions
• Jealousy & competition
• Perceived & real alterations in referral patterns
28% expect to
28% expect to
stay at first job
• IT competency stay at first job
> 4 years
> 4 years
• Mobility of employed physicians disruptive & expensive!
Hopeful News
• Cultural values change….not basic commitment
• Quality and Peer Review
RELATIONSHIPS
American College of Healthcare Executives 39

40. Economic Impact of Physician Relationships
Percent of Non-Primary Care Office Visits Referred by Another Physician
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
RELATIONSHIPS
Source: National Health Statistics Reports. US Department of Health and Human Services. Number 3, August 6
American College of Healthcare Executives 40

41. Difficult to Get Traction…
When You are Playing in a Sandbox
Education about each other’s interests
•
Entitlement to different things…
•
Social & educational sessions
•
Share technology: IT, EMR, robot
•
“Group counseling”
•
It’s our burden to understand them…
•
RELATIONSHIPS
American College of Healthcare Executives 41

42. It Might Be All About You…
What are your generational views?
Are you physician friendly?
Have you really gotten over a bad piece of history?
RELATIONSHIPS
American College of Healthcare Executives 42

43. What Management Can Do…
Practice what you preach: Build respect among senior
executives
Be role model: Mentor your directors & managers
Clarify responsibilities: Thin line between front-line
empowerment & interference
Promise only what you can deliver: Collective memory
embarrasses elephants
RELATIONSHIPS
American College of Healthcare Executives 43

44. Trust
• Please don’t start off by promising a
“new compact”
• BOT, Executives and Medical Staff Leaders present
when major decisions are made.
• Dialogue is a conversation between 2 or more people
• Admit mistakes…only if you have ever made any
• Acknowledge the past, live the present, and anticipate
the future
• Getting to Yes really works…gaining an
understanding of the other party (empathy) is RELATIONSHIPS
first step
American College of Healthcare Executives 44

45. Leadership Development
Leadership Training
BOT-Medical Staff-Executives retreats
Mentoring
Coaching
RELATIONSHIPS
American College of Healthcare Executives 45

46. American College of Healthcare Executives 46

47. Physician Motivation
Do the right thing for my patient
•
I am accountable for the care of my patient
•
Intrinsic Getting past “I can’t practice cookbook medicine” and “blame”
•
Help me get my job done…and have a life
•
Give me meaningful quality proposition & real power to
•
change things
Peer pressure, competition and public reporting
•
Patient satisfaction: My patient vs. all patients
•
Extrinsic Risk management
•
Aligned incentives…sometimes
• SERVICE
American College of Healthcare Executives 47

48. What do Physicians Want?
#1: How the administration responds to my ideas and needs
•
Easier to care for patients: timeliness of order fulfillment, nursing staff
•
reports, quality of nursing staff
Physicians most satisfied in their first 5 years and > 20 years on staff
•
Physicians employed by the hospital are more satisfied
•
than non-employed physicians
Surgeons are the least satisfied
•
Correlation between satisfied patients, employees,
•
& physicians
2008 Press Ganey Hospital Check-Up Report -
2008 Press Ganey Hospital Check-Up Report - SERVICE
Physician Perspectives on American Hospitals
Physician Perspectives on American Hospitals
American College of Healthcare Executives 48

49. Quality
• Key Strategy… not a program… it is what we do… the
services, the processes
• Long term physician and patient loyalty
• Unique opportunity to connect to both groups
• Fulfillment of personal and institutional mission: Do the
right thing
• Quality is better than free
Direct 150 P4P programs by government,
incentives: insurers and businesses
Direct Public reporting, Never Events, lawsuits & SERVICE
disincentives: regulatory enforcement
American College of Healthcare Executives 49

50. Quality & Physician Alignment
Quality Culture: I’ll know it when I see it and feel it.
Medical Staff
Process I can trust…led by leaders I trust
•
Make it worth my while
•
Set meaningful goals that I can relate to
Go for simple process changes that improve quality and work life
Confidentiality is sacred…to the point permitted by law
•
Hospital
Clearly communicated commitment…and actions…to improve care,
•
services and processes
Delegation to clinicians
•
Elimination of mindless data collection and reporting SERVICE
•
Clean usable data and let me figure out what it means
American College of Healthcare Executives 50

51. Quality is Good Business
• Top 5: ACHE Top Issues
• Strategic business goal
• Direct financial incentives
• Process Improvement
• Better use of everyone’s precious and costly time
• Satisfied patients and staff = Business growth
• Errors and rework are costly in human life, suffering,
time and dollars
• Financial markets SERVICE
American College of Healthcare Executives 51

52. Financial Markets
Successful quality strategy
Strong physician buy-in
•
Board of trustees (BOT) long-term strategy
•
Competitive differentiation
Evidence-based outcome measures
•
Improved patient safety
•
Financial performance
Consumer preference/demand = Market share growth
•
Better outcomes = Better payer reimbursement
•
SERVICE
Source: Moody’s Investors Service: Improving clinical quality and patient safety of greater importance to not-for-
profit hospitals, May 2006.
American College of Healthcare Executives 52

53. The Value Proposition: Efficiency
What can I do Look how much
vs.
for you today? we have done for you….
• What will give the physician some ROI on hisher
time?
Systems that make sense for physician and staff
Improve efficiency; decrease hassles
• Staffing & Support
SERVICE
American College of Healthcare Executives 53

54. Infrastructure Support
System support
• Clinical staff
Lean Management
Magnet Status
• Happy & available staff
• Good communication
• Independent…but collaborative
• Structure & staff to support, monitor, & measure
QI, peer review, Department of Medical Affairs, IT, Physician Liaison
Compensation for time
• Chairs and officers: quality/safety are essential role functions SERVICE
American College of Healthcare Executives 54

55. Information Technology
Information Technology
Provider Order Entry & data retrieval
•
Web Portals
•
Simple “no cost” data access from anywhere
Compete with private laboratories
Real-time transcription
•
Mobile voice & data devices for nurses, hospitalists, emergency physicians
•
IT & EMRs
Hospital &/or PHO lead
•
Hospital owned medical group has substantial impact on system selection
Integration with hospital systems
•
Bidirectional data transfer
Server home & tech support
Federal & private payer initiatives
• SERVICE
Hospitals fund 85%
American College of Healthcare Executives 55

56. The Value Proposition:
Hospitalists & AHPs
• Less call & less competition • Intended consequences
• Medicine Consistency, quality, P4P
& utilization
In-patient care
Support for specialists
• Surgery
Orthopedics • Unintended consequences
General Surgery Community physicians
Ob-Laborist
• further away
• AHPs Alienation of some
patients
Orthopedics
Handoff risks: community
General Surgery
to hospital care
GI
SERVICE
American College of Healthcare Executives 56

57. Physician Liaison Program
• Pattern recognition & early intervention
I can predict the past with 100% accuracy
Database issue tracking
• Close the loop
• Personalities
• Relationships
Recruiters
Medical Staff members
Medial staff leaders
Senior Executives SERVICE
• ROI
American College of Healthcare Executives 57

58. American College of Healthcare Executives 58

59. Physician-Hospital Alignment &
Governance
Mission…do the right thing for patients
•
Active involvement of Board
• Best Practices for Board
Best Practices for Board
Involvement:
Involvement:
Physician & patient loyalty
• 1. Get Educated
1. Get Educated
2. Insist on the Numbers
2. Insist on the Numbers
Accreditation
• 3. Recognize need for a Pluralistic
3. Recognize need for a Pluralistic
Approach
Approach
Transparency/public reporting
• 4. Hold Leadership’s Feet to the
4. Hold Leadership’s Feet to the
Fire
Fire
Financial strength
• 5. Take Time to Connect with
5. Take Time to Connect with
Physicians Yourself
Physicians Yourself
Source: C. Clark, Senior Principal,
Source: C. Clark, Senior Principal,
Center for Health Innovation, Noblis
Center for Health Innovation, Noblis
GOVERNANCE
American College of Healthcare Executives 59

60. Let’s Get a Bit Personal
Executive incentive compensation measures typically include:
Profitability
•
Quality/safety outcomes
•
Core measures
•
MSDP/Physician recruiting
•
Physician satisfaction
•
Avoidance of Federal Enforcements
Financial arrangements with physicians is a virtual minefield
•
DOJ & OIG enforcement actions for quality of care include civil &
•
criminal penalties
False claims GOVERNANCE
Just plain old poor quality
American College of Healthcare Executives 60

61. ECHN BOARD
Board PA/I Committee
OFFICE OF MEC
PRES/CEO SYSTEM Level
Provides Direction
Receives reports & Identifies projects
Sends Report to Board
PI report & pertinent info
PI report, & pertinent info and issues
and issues brought by admin VP’s
brought by MS reps to Board PA/I
to Board PA/I Committee
Committee
QIC
Administrative, Staff and Medical Staff Representatives
Reviews management and Medical Staff reports, CHA,
CMS/Qualidigm/CPRO, and JCAHO reports & report card
data. Identifies & initiates
Requests
projects with Medical Staff and projects MS Peer Review
Administrative champions
Committees
Pe
ly
on
rtin
o
en
inf
t re
s&
po
ort
rts
rep
&
inf
t
en
Care of Patent with o
rtin
on
Rapid Response
ly
…CHF,
Pe
Team
Pneumonia, MI
MS Committees
Hospital committee & Dept
Support provided by QI staff and Departmental
QI & Operational
QI&Operational
Reports
Reports
American College of Healthcare Executives 61

62. Governance Structure
BOT
Bylaws, nominating process & committee structure that encourage
physician participation & link to medical staff
Direct connection with physicians for quality & credentialing
Medical Staff
Support staff for credentials, quality & peer review
Bylaws issues
AHPs
•
ED call
•
Quality, safety & utilization compliance
•
Health law support GOVERNANCE
American College of Healthcare Executives 62

63. Governance Style
• Set planning goals
Medical Staff,
Executives & • Make changes
BOT jointly • Monitor outcomes
• CEO-Medical Staff
Officers-BOT Chair
Communication
• Effective pathway to
hear from physicians
GOVERNANCE
American College of Healthcare Executives 63

64. Who are Physician Leaders?
Elected leaders
Opinion leaders
Contracted leaders
• VPMA/CMO
• Service Line/Program Medical
Directors
GOVERNANCE
American College of Healthcare Executives 64

65. Being a Physician Leader
• May be difficult to identify true physician
leaders
• Physicians may view leadership very
differently than others
• Leaders able to maintain position in the heat of battle
• Leaders who manage tough issues may pay the price
in clinical & personal life
GOVERNANCE
American College of Healthcare Executives 65

66. Changing Medical Staff Governance
Good ole days Now
Loosely associated autonomous
• • Formal structure
physicians • 20% do 80% of care
Physicians needed place to care for
• • Regulators: hospital is responsible for
patients care quality …physicians not so sure
Little incentive to participate in quality,
• • Bylaws focused on quality, safety,
safety & medical management patient care
Bylaws focused on individual rights
• • Only real authority is to restrict or
Medical Executive Committee (MEC)
• revoke privileges
Elected voluntary leaders • MEC
Inpatient medical staff business Elected & contracted leaders
Quality, safety, credentials
Compliance
GOVERNANCE
American College of Healthcare Executives 66

67. American College of Healthcare Executives 67

68. Ventures
Joint Ventures
•
Service Line & Medical Directorships
•
Call Coverage Agreements
•
Information Technology-EMR
•
Employment
•
Incentive Based Payments
•
VENTURES
American College of Healthcare Executives 68

69. Legal Advice
Need up-to-date, practical & reasonable counsel more than
ever before
Numerous places to stumble & really get hurt… both with
relationships & regulators
Having to withdraw or modify promises to physicians due to
unknown legal requirements is a frequent cause for loss of
deal…& loss of trust.
VENTURES
American College of Healthcare Executives 69

70. Joint Ventures
Clinical Services
• ASC, Endoscopy, Imaging, Oncology-Radiation
Therapy
Real Estate
• Medical building REI trusts
Future?
• Reimbursement
• Aging & shrinking independent medical staff
VENTURES
American College of Healthcare Executives 70

71. Lessons Learned Regarding JVs
“Joint ventures are very complex arrangements. There
are a lot of legal barriers, which physicians
do not have the patience to understand.”
Up-front education
is a must “Physicians have a tendency to believe that the fact
they can bring their patients to the JV will relieve them
of the responsibility to invest cash. This is not true.”
“We have learned that you have to keep the
joint-venture process simple. We have mostly solo
practices and very small groups. Very few of our
Hospitals should
physicians have the knowledge and sophistication
expect to do the
required to make joint ventures work. We have had to
legwork do most of the work to structure the ventures, because
they simply do not have the resources that are
needed.”
VENTURES
71
American College of Healthcare Executives

72. Medical Directorships
• Reimbursement for officer, chair, chief,
medical director & other roles
• Role growing to manage specific services
• Quality, safety and efficiency with
incentives
• Difficult to obtain valid FMV data
New roles in rapidly changing environment
Separating nonclinical compensation from clinical salary
challenging
MGMA, ACPE, Sullivan-Cotter surveys VENTURES
American College of Healthcare Executives 72

73. Service Line Management
• Hospital contracts with physician
management company to manage clinical
service
• Opportunity for physicians to control clinical
services, control costs, improve quality….
that's the good news and the bad news
VENTURES
American College of Healthcare Executives 73

74. ED Call Coverage
• Emblematic of struggle between hospitals’ and physicians’
needs & interests
• Time is $
• Much larger factor in primary care-specialist
rifts than commonly acknowledged
• Multiple legal tripwires to maneuver
VENTURES
American College of Healthcare Executives 74

75. ED Call Coverage
• Solutions reflect empathy, business needs,
and communication
• OIG Advisory Letter (9/07)
• Multiple solutions
Contracted rates for daily coverage above “fair
share” obligation
Payment guarantees
Creative finance plans
• EMTALA Community Coverage Plan VENTURES
American College of Healthcare Executives 75

76. THE FABLE OF THE SURGEON & THE TENT
• Porridge for one is expensive
• The pot of gold at the end of the rainbow is a
mirage
• The golden years aren’t
American College of Healthcare Executives 76

77. Physician Employment is
Different This Time
• Substantial economic advantages for systems that “This is the
“This is the
beginning of a
integrate payers, hospitals and physicians beginning of a
fundamental
fundamental
• View physicians as “fundamental strategic asset”
restructuring of how
restructuring of how
• Greater emphasis on developing physician leadership physicians function
physicians function
and systemized physician engagement in the health care
in the health care
*** system.”
system.”
• Primary care & specialty physicians William Jessee, MD, President of
William Jessee, MD, President of
the Medical Group Management
the Medical Group Management
• Younger (70-80%) & older physicians want it Association.
Association.
• Willingness to trade off autonomy for economic security
• New generation seeking improved work/life balance
***
• Payers shifting to incentive based payments, e.g. P4P
and Medical Homes VENTURES
American College of Healthcare Executives 77

78. Hospital Group Employment
Business Structure ROI
Practice management Treat as capital investment
• •
MCO enrollment, billing & Data tracking of downstream revenue:
•
reimbursement in-patient and ancillary testing
Step outside…way outside… of usual If you are paying for call
• •
hospital roles already…makes sense
HR &Legal
Medical Director
Professional medical group Which Beans Do You Count?
administrator
Inpatient & ambulatory care revenue
•
Quality, P4P, LOS enhancement value
•
Support for specialists
•
Managed Care Issues
Continuity of care within system
•
Hospital investment in IT/EMR
• VENTURES
Joint physician & hospital contracting
•
American College of Healthcare Executives 78

79. Employment Pitfalls
• Assume loyalty of physicians…and
manage just like other employees
• Failure to manage BOT, medical staff
& executives’ expectations
• Assign functions to hospital Finance, HR, Legal &
Business directors…without adequate preparation
• Overoptimistic growth projections
• Failure to establish incentive compensation
& long-term comp plans VENTURES
American College of Healthcare Executives 79

80. Medical Staff Development Plan
(MSDP)
Community need
Business/Strategic need
Regulatory documentation of need
Plan for how to support new physicians
• Loan security agreement Q&A and legal documents
• Employment entity & infrastructure to make it happen
VENTURES
American College of Healthcare Executives 80

81. Physician Resource Assessment Model*
Population Characteristics Mix of Specialties
MARKET
& Projections INTERNAL
MARKET INTERNAL
Medical Staff Characteristics
Assessment Assessment
Assessment Assessment
Physician Demand
Retirement Vulnerabilities
Benchmarks
Perceived Need
Consumer Preferences
Health Status Service Line & Geographic
Growth Objectives
Current Physician Supply
Qualitative Input
Quantitative Approach Projected Projected
COMMUNITY HOSPITAL
As much an art as a
Strong analytical NEED NEED
science
approach by Specialty by Specialty
Making it relevant for your
In-depth knowledge of
strategic priorities
physician demand
Understanding medical
benchmarks RECOMMENDED
RECOMMENDED
staff dynamics (generational
ADDITIONS
ADDITIONS
Customized to Physician
to Physician differences, call coverage,
Staff
methodology Staff productivity, loyalty)
American College of Healthcare Executives 81
* Source: Noblis Center for Health Innovation

82. MSDP Confounding Factors
• Takes 1.3-1.5 to replace older physicians
Office
ED call
Are the standard
• EMTALA Community Call
ratios still valid?
• Efficiency?
IT & EMR
Electronic communication
How frequently do
• Mobility by younger physicians
you need to update
• Competition
plan to stay current?
• Hospitalists
• AHPs
• Part time physicians
How do you count?
Younger and older physicians
Do part time “FTEs” equal half of full VENTURES
time FTEs?
American College of Healthcare Executives 82

83. Recruiting
• High level team
Broad input finds the good, bad & ugly early in process
CEO involvement
Understand the regs…use them…don’t hide behind them
• Candidate’s first impressions reflect organization process
• Close the deal
Rapid decision-making for changing needs
Ready in HR, legal & community
Contract templates
Salary information
Offer what they want
VENTURES
American College of Healthcare Executives 83

84. Better Together or…
Bitter Together?
Pay for Performance
Gainsharing
Bundled payments
Participatory bonds
Under Arrangement
VENTURES
American College of Healthcare Executives 84

85. Special Situations:
Mergers & Acquisitions
Clinical staff care about their service; it
is not a board game to be picked up or
discarded at whim. Nor do patients
appreciate being treated like pawns.
We need continuous evaluation of
change to ensure that quality and cost
containment are being achieved.
VENTURES
Harvey D. Personal views: Hospital games. BMJ. 2000;321:713.
American College of Healthcare Executives 85

86. Special Situations:
Mergers & Acquisitions
Medical staff…big unknown
• Influence &/or behavior can make or break
merger
What does the physician gain
from merger?
VENTURES
American College of Healthcare Executives 86

87. Special Situations:
Mergers & Acquisitions
Gain Loss
Financially stable Altered mission
• •
environment…save the Religious vs secular
AMC vs community
hospital?
Open or closed faculty
•
Managed care rates
•
New competition
•
PHO
Facility or program
•
New facility
•
consolidation
New technology
Travel time
Larger primary care base
•
Connection to CEO/BOT
•
Choice of specialists
•
Governance style
•
Bylaws protections
• VENTURES
American College of Healthcare Executives 87

88. Special Situations:
Mergers & Acquisitions
• Merger advisory group membership
Merger of equals vs. acquisition
• Study & manage the culture
• Early decisions
Merged or separate medical staffs
Bylaws “hot buttons”
• ED call coverage
• Board certification
• Officers, Chairs, Chiefs
• Communication
Early & frequent written & in person
Rumors
VENTURES
Anticipate naysayers…they may have important things to say
American College of Healthcare Executives 88

89. Strategies that Work
What has your organization tried?
How effective have you been?
What has really bombed?
What do you think are the top 3 alignment
strategies? Why?
American College of Healthcare Executives 89

90. How to Make it Work for You
American College of Healthcare Executives 90

91. American College of Healthcare Executives 91

92. Conduct a Formal Physician-
Hospital Alignment Process
1) Assess the current situation – interviews, surveys, data.
2) Process the results and develop recommendations with a Physician
Advisory Group…. but be sure the right physicians are at that table!
3) Conduct a retreat to share the results and initial
recommendations with the broader medical staff.
4) Develop a formal Physician-Hospital Alignment
Plan outlining the recommended portfolio of strategies.
5) Obtain approval of the plan by the MEC and Board.
6) Monitor and reevaluate results of the plan and the changing
environment throughout implementation.
Focus on developing a multi-faceted approach
92
American College of Healthcare Executives

93. 10 Things to Do Back at the Ranch
Create a physician strategic advisory group
Get physicians, BOT, and Administration together at the right
places: planning retreats, governance, quality
Form an entity to employ physicians
Create a recruiting group and do a MSDP with physician input
Manage generational issues with medical staff, BOT & execs
Establish a physician liaison program
Recruit (or hold onto ☺) the right VPMA/CMO
Deploy IT/EMR & manage new financial models via PHO
Set up meaningful educational & social interactions for
medical staff
Develop future leadership
93
American College of Healthcare Executives

94. Thoughts for the Future
Who will be the physician leaders of medical staff & BOT?
• Will physician board members need to be employees?
• Will physicians become the CEOs & BOT leaders?
• How will we approach leadership development for the next generation?
How will hospitals afford employed physicians?
• Will joint hospital & medical group contracting increase revenue?
• Will risk models return?
Will medical staff of the future look anything like today’s?
• What impact will employed physician model have on governance?
94
American College of Healthcare Executives

95. Making it Work for You
How ready is your organization to implement
these strategies?
What are the major opportunities and barriers to
implementation?
What do you think the impact of the economic
crisis and/or new administration will have on
implementing alignment strategies?
95
American College of Healthcare Executives

96. Amy MacNulty
Amy MacNulty is a Senior Principal and Northeast Region Manager
Amy MacNulty is a Senior Principal and Northeast Region Manager
for the Noblis Center for Health Innovation, a leading advisory group
for the Noblis Center for Health Innovation, a leading advisory group
to health providers. With over 20 years of healthcare experience in
to health providers. With over 20 years of healthcare experience in
strategic planning, physician strategies and regulatory services
strategic planning, physician strategies and regulatory services
planning, she is a recognized leader in developing and implementing
planning, she is a recognized leader in developing and implementing
strategic and physician-hospital alignment plans.
strategic and physician-hospital alignment plans.
In 2006, MacNulty co-authored Strategies for Physician-Hospital
In 2006, MacNulty co-authored Strategies for Physician-Hospital
Alignment: A National Study sponsored by AHA’s Society for
Alignment: A National Study sponsored by AHA’s Society for
Healthcare Strategy and Market Development. She is also the co-
Healthcare Strategy and Market Development. She is also the co-
editor of Noblis’ Journal for the Center for Health Innovation,
editor of Noblis’ Journal for the Center for Health Innovation,
Horizons. MacNulty holds a MA in Business Administration from
Horizons. MacNulty holds a MA in Business Administration from
Northeastern University.
Northeastern University.
96
American College of Healthcare Executives

97. Joel J. Reich, MD, FACEP
Joel J. Reich is the Senior Vice President for Medical Affairs for
Joel J. Reich is the Senior Vice President for Medical Affairs for
Eastern Connecticut Health Network (ECHN). Previously, he served
Eastern Connecticut Health Network (ECHN). Previously, he served
as ECHN’s Chair/Senior Medical Director of the Department of
as ECHN’s Chair/Senior Medical Director of the Department of
Emergency and Ambulatory Care Services.
Emergency and Ambulatory Care Services.
Dr. Reich serves on the boards of the Connecticut Hospital
Dr. Reich serves on the boards of the Connecticut Hospital
Association, NCC-EMS Council, ECHN Health Services
Association, NCC-EMS Council, ECHN Health Services
(multispecialty group practice), CHIC (captive insurance company),
(multispecialty group practice), CHIC (captive insurance company),
and Ambulance Service of Manchester, Inc. He holds a BA from
and Ambulance Service of Manchester, Inc. He holds a BA from
Brandeis University, a MA from The Sever Institute of Washington
Brandeis University, a MA from The Sever Institute of Washington
University, MD from SUNY at Buffalo, and MMM from Carnegie
University, MD from SUNY at Buffalo, and MMM from Carnegie
Mellon University. He completed his emergency medicine residency
Mellon University. He completed his emergency medicine residency
at Georgetown University Hospital.
at Georgetown University Hospital.
97
American College of Healthcare Executives

98. Contacts
Amy MacNulty Joel J. Reich, MD, FACEP
Senior Principal Sr Vice President for Medical Affairs
Noblis Center for Health Innovation Eastern Connecticut Health Network
1050 Waltham Street 71 Haynes Street
Lexington, MA 02421 Manchester, CT 06040
781-482-4072 office 860-647-6866 office
781-863-5657 fax 860-647-6476 fax
amy.macnulty@noblis.org jreich@echn.org
www.noblis.org www.echn.org
98
American College of Healthcare Executives