Hayes Review: February 2010

Hospital – Physician Alignment: A Strategic Imperative

By Nira Mahesh and Rosie Montemayor

Leaders in both hospitals and physician practices have realized the benefits of hospital/physician alignment on operations, finances and patient care coordination. This doesn’t necessarily mean that they have acted on it. There continues to be great opportunities for these organizations to form solid, strategic partnerships. It is easy to say there isn’t enough time or resources to spend planning to achieve this goal; however, the future will exact a price on those that do not.

Alignment allows physicians to focus on their strength - patient care – and leaves administration to administrators.  It’s becoming increasingly expensive to run a physician practice that has up-to-date technology, and it’s time-consuming to keep up with changing regulations. The hospital’s patients come from physician practices in the area. Hospitals and physicians that have taken the time and effort to partner have become better able to meet their goals, provide higher quality and better integrated care and increase their footprint in the market.

Sounds good – but where do you start? Below are some big, ethereal-sounding ideas, but when boiled down to action steps, are not so difficult to implement. To build a foundation for alignment, physician and hospital leadership must work together to:

• Co-develop guiding principles.
• Establish the structure, governance and culture of the alignment.
• Build a true “physician-led organization” which means that physician leadership is a strong voice.
• Develop a timeline that allows the culture and alignment of an organization to evolve and develop. It doesn’t happen overnight.

Depending on the organizations’ specific goals and objectives, other ingredients for successful alignment may include:

• Performance measures that are used for budgeting, planning, compensation and performance evaluation
• Compensation for physicians who meet productivity and performance goals
• Compensation for administrators who meet leadership and administrative goals
• Clear guidelines for quality care, and a process for monitoring care indicators
• A common information technology platform
• Improved access to patient medical information

Initiatives (such as pay-for-performance) that reimburse physicians and hospitals based on quality measures encourage exceptional service and compliance with clinical guidelines. This creates a win-win-win situation for the physician, hospital and patient.

Although the government mandates that physician practices purchase and maintain electronic health record systems, the cost is often prohibitive. As a result, one of the more common and successful alignment strategies that we have seen (and have helped put into place) is one in which hospitals and physician service organizations provide EHR services to physician practices and/or serve as the physician practice’s application service provider (ASP). ASP services include technical support, physical and electronic security and built-in support for business continuity.  This type of service bills on a "per-use" basis or on a monthly/annual fee, which is much more manageable for most independent practices.  Hayes has developed financial models for hospitals and physician practices to determine scenarios that will work best for each.

Alignment is a continuing process. Healthcare reform and the need to balance access with quality and cost will continue to drive alignment strategies. In most organizations, there is no single strategy that will meet all needs. Therefore, a menu of alternative strategies is required. This menu will change over time. Decision makers on both sides (physician and hospital) will need to come up with creative new approaches that meet organizational goals and the challenge of government regulations as they change and evolve. However, one thing is clear: the benefits of alignment extend beyond the present to the future and beyond the providers to the patient.

Nira Mahesh uses her eight years of experience in the medical industry, including scientific research, to help clients with eMAR installations, end user support and training.

Rosie Montemayor is certified in Allscripts Enterprise EHR and GE Centricity Business and has 10 years of outpatient management experience. She helps Hayes clients with EHR planning and implementation.