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Hospital-Physician Alignment Print E-mail
Written by Todd Demel, MBA   
Monday, 20 June 2011 00:00


During a time when we are seeing a cyclical change towards hospital employment of physicians, there has been an increased focus on strategies for achieving successful physician/ hospital alignment. Although similar such efforts failed in the early 1990s, hospitals today are adopting a different approach to employing practices. While the primary difference has to do with the structure of physician compensation, there are best practices that can be employed to increase the likelihood of successful relationships.


The trend toward hospital employment has come about for a number of reasons. Among these, it has become increasingly challenging for physician practices to go it alone. Most physicians expect at least some sort of increase in compensation when teaming-up with a hospital. In addition, malpractice liability insurance along with certain administrative functions is often assumed by the hospital, thus giving physicians an added sense of security.  In an increasingly competitive environment, hospitals may employ physicians to gain market share, to support Emergency Department call, or increase referrals to their facility. The hospital may also seek out particular specialists in order to assure strength in strategically important clinical services.  


With new pressures being exerted on providers, such as quality/outcomes reporting, reductions in professional and technical fee reimbursement, and increased regulatory requirements, the need for clinical integration has become more pronounced. A recent development that both supports and encourages integration is the collaborative effort between hospitals and physician practices in establishing an electronic medical record (EMR).


Previous federal policy that enacted a 'Safe Harbor' related to Stark Regulations has allowed hospitals to donate EMR hardware, software, training and support services to physicians. While practices must contribute 15 percent toward the donor's cost of the items and services provided, this still represents a significant savings for physicians. Due to impending deadlines beginning in 2011 on financial incentives associated with the Health Information Technology for Economic and Clinical Health Act (HITECH Act), there has been increased focus on the establishment and use of EMR systems. This type of shared technology goes right to the foundation on which hospital-physician integration should be based: the care of patients and patient information. And the sharing of patient clinical data provides the opportunity for providers to improve the quality and effectiveness of care delivery as well as achieve the long-range goal of cost reduction.       


With discussions regarding Accountable Care Organizations (ACOs) front and center, it is also important for hospital-owned practices to maintain a culture of accountability. This translates into physicians being involved in the strategic decision-making of the practice, and the new entity retaining the ethos of the private practice in spite of the changes in management and standardization of certain processes. Allowing physicians to retain some control, involving them in governance and operations, and providing incentives can contribute to the success and longevity of the newly-formed relationship.

By empowering the physicians, they become accountable for the success of the practice rather than relying on or blaming the hospital for their successes or failures. Promoting participation of physicians on boards, governing councils, and oversight committees, for example, is also likely to reduce physician turnover. This type of collaborative effort fosters a team approach wherein the hospital/ physician partnership becomes aligned.  

ABOUT THE AUTHOR:  Mr. Demel is Senior Executive of Physician Management Services at MF Healthcare Solutions.  Possessing both operational and financial backgrounds, the MF Healthcare Solutions management team has vast experience in a range of healthcare industry settings. Our combined expertise enables us to offer specialized and effective physician practice management services. For more information, please visit: or contact Todd Demel at (954) 475-3199.

Last Updated on Wednesday, 29 June 2011 16:36

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