From Physician Employment to Physician Alignment

From Physician Employment to Physician Alignment

February 2014

Physician Engagement is the Leading Pain-Point for Healthcare Organizations

With the changing pressures brought on by the Patient Protection and Affordable Care Act and the inevitable reimbursement reductions, it comes as no surprise that health systems continue to maximize efforts to grow physician networks to preserve their patient base.

HealthLeaders Media, in collaboration with MedSynergies, launched an independent survey of healthcare executives to explore the most prevalent and effective staffing strategies for supporting Physician Alignment. The data was compiled in a comprehensive report titled “Physician Alignment in the New Shared Risk Environment."

The survey results reveal that a staggering 87% of respondents anticipate an increase in their organization’s employed physician base within the next 36 months. This is a significant 16-point rise compared to the 2012 survey. At the same time, 70% of respondents anticipate their organization’s number of independent physicians will decrease over the next three years.

The Shifting Staffing Landscape

This publication comes during a critical shift in the physician compensation model from fee-for-service to pay for performance, driven by policies like the Patient Protection and Affordable Care Act. The research reflects how the shift has impacted health systems and their physicians, and how both are using collaboration and productivity measures to ensure future quality and efficiency.

The report also questions whether hospitalists, medical staff assignments, and paid directorships are facing extinction as classic staffing models dwindle under increasing clinical integration, clinical co-management, and joint ventures. Based on survey results, clinical co-management agreements stand at 15% now, and respondents say that will increase to 30% in the three-year time frame.

Other key findings include:

• 42% of respondents have difficulty with physician engagement, more than any other factor.

• 73% of respondents say that buy-in to quality and safety initiatives are among their top three objectives behind physician alignment strategies.

• 62% of respondents say that the desire for stable income is the top motivator for physicians seeking employment.

• In spite of recent attention to adding employed physicians, relationships with independents appear strong. While the percentage of independents is declining, they are still expected to be in the majority (56%) compared to employed physicians (44%) in three years.

The Right Compensation Model is Only a Starting Point

While looming financial pressures are driving physicians to employment, the rewards of focusing on quality measures are validating the decision. Nearly three-quarters of hospitals and health systems (78%) are paying employed physicians for nonproductivity performance such as patient satisfaction, clinical quality, and citizenship. This figure is expected to rise to 94% in the next three years, but approximately 64% of independent physicians are missing this compensation altogether.

Finding the right compensation model is important to building strong physician relationships, but it’s only a starting point. True physician alignment requires an enhanced focus on engaging physicians. This survey clearly shows that the number one motivator behind creating these strategic relationships is achieving physician buy-in on quality and safety initiatives.

Building Strong Physician Relationships

The most important step in reaching this goal is working with physicians to create a unity of purpose. It’s only through an effective process of collaboration, communication and governance that physicians get a say in these initiatives and feel tied to the big picture. It’s no surprise that in this survey, physician engagement ranked highest as the most difficult aspect of managing physicians. It’s time to embrace interdependence and come to an agreement on what that means for both parties. Health systems that can achieve this through physician alignment will stand above the rest. But more importantly, their patients win.