Communication between physicians, management crucial for cost savings

Two people shaking hands

LAS VEGAS--If you want your hospitals or health systems to be more competitive in terms of cutting costs or engaging in value-based care, take steps to improve communication between your clinicians and managers.

That was the takeaway from two presentations by high-powered physician executives at the Healthcare Financial Management Association's Annual National Institute in Las Vegas earlier this week.

Sachin Jain, M.D., chief executive officer for CareMore, a Medicare Advantage health plan/provider based in Southern California, noted that executives on the finance and management side often have difficulties building trust with physicians. That's particularly challenging because he observed that physicians “have difficulty consuming change.”

At the same time, Jain also noted that many physicians “don't ever learn a lick about financing healthcare.”

Andrew Agwunobi, M.D., chief executive officer of the UConn Health system, noted that too many physicians are disengaged from participating in measures that would improve quality and cut costs.

How to better engage physicians with healthcare executives?

Knowing each other's territory and jargon helps. Jain recounted executives who have gone on site visits with doctors and have no idea what a cardiac catheterization laboratory is, other than it's important to the healthcare enterprise. That destroys any chance of having credibility with the clinicians.

At the same time, Agwunobi said that many doctors don't know business terms. “They won't ask what FTEs or RVUs mean, and they won't because they're embarrassed they have to,” he said. To rectify this, he suggests explaining these terms to help physicians.

To that end, CareMore has established an academy for its medical staff to brush up on their business skills and better bridge the gap between management and the clinical side.

The advice of both executives is a more granular form of suggestions offered by healthcare finance experts, who generally emphasize improved physician engagement in order to make such initiatives work. Executives also need to be willing to improve the overall culture of their organizations so that improved morale will lead to more consensus on making changes.

Once good communication is established, Agwunobi recommended that management be realistic in terms of any value-based or money-saving initiatives. Not only should the data put forward be “bulletproof,” but projections must also be open-ended, he said.

“Don't start with targets such as saving $10 million in the first year,” he said, adding that that would create anxieties regarding a potential negative impact to the quality of care being delivered. Instead, provide a fairly broad range of potential savings, and look for all ways to improve costs and quality. By taking that approach, “you can get more (savings) than you think,” he said.