In a previous blog in this series, after having presented our case supporting
our belief that physician integration is a critical success factor for
any hospital or health system, we asked the question – Why is physician
integration so hard to achieve? It is this question that we will attempt
to answer in this blog.
Since the introduction of DRGs as a payment mechanism, the polarization
between medical staffs and hospitals has accelerated. Hospitals no longer
get paid for “keeping patients in their beds", which impeded
the doctors’ ability to maximize their revenue through their daily
visit charges which grew each day the patients remained in the facility.
It was at this point in healthcare that the incentives for hospitals and
physicians began to grow apart. Unfortunately, this polarization has only
been increased as a result of declining government reimbursement, at the
federal and state levels, causing both sides to implement often opposing
strategies to gain a bigger share of the remaining monies. A major, long
term, negative outcome has been the assumption of the most profitable
hospital service lines in doctors’ offices, physician-owned clinics,
ambulatory surgical centers, and other settings. Clearly, what seemed
like appropriate solutions for physicians created significant and painful
competition for hospitals and which, in turn, accelerated the disintegration
between the two most critical partners in caring for patients. What was
good for one became disastrous for the other.
Some of the present posturing between physicians and hospitals relates
directly to the way physicians are “raised”. Medical school
and residency training programs have historically fostered independent
thinking, failed to teach methods for strong teaming, and offer little
about how to develop strong interpersonal skills. In addition, post-graduate
and continuing education programs continue to enhance this polarity by
offering training to physicians separately from administrators, nurses,
and Board of Trustees, thus exacerbating the "we vs they" conundrum
. Sadly, we have seen first hand that the constituents that are the key
to collaboration are often trained separately, with agendas and topics
that stress the need to compete with the other in order to survive.
Physician education teaches the “scientific approach”, creating
a level of discomfort with “grey areas” which must be addressed
in strategic as well as operational decisions. Doctors often have difficulty
with change and are not comfortable with learning and practicing effective
Perhaps even most important, there is significant polarity among physicians
themselves, which further impedes their collective integrative behaviors.
In contrast to much earlier times in medicine, today there is “no
common voice” among physicians. Varied positions and thinking are
occurring between younger and older physicians, primary care and specialists,
low income generating and the high revenue producing interventional specialists,
and male and female physicians. The belief that “we doctors are
all in this together” is long gone!
Yes, physician integration is a critical success factor, but for obvious
reasons, is difficult to achieve. There is increasing tension on both
sides. This polarity, if not addressed and minimized, will continue to
create sufficient opportunities for even more new players to enter the
market with healthcare delivery services once owned solely by the hospitals
in partnership with the medical staffs. As now being experienced in some
parts of the country, these new players include insurance companies, pharmacies,
and large companies like Walmart.
If this is the reality of the moment, what are the key strategies to achieve
successful integration, thus reducing the polarity, aligning incentives,
and increasing collaboration? This is the next question we will address
in a future blog. Stay tuned!