Steps to creating sustainable physician integration

It's clear that hospitals and health systems are looking for ways to create sustainable relationships with physicians, whether it be through physician employment, practice acquisition or contractual arrangements, according to an article published in Trustee magazine by experts at Kaufman, Hall & Associates, Inc., a healthcare financial strategy firm in Skokie, Ill.

"In most areas of the country, the race is on to establish new hospital-physician structures, acquire practices and employ specialists and primary care physicians under various compensation arrangements," the authors wrote. "In many regions, physicians themselves are proactively seeking employment or other more formal alignment options. To achieve better results, alignment models must be different from those of the 1990s."

They recommend taking the following steps to create lasting physician relationships:

  • Develop an integration plan between the physicians and the organization: This integration plan should be combined with the overall strategic plan around service lines, facilities and technology, among other things.
  • Ensure sufficient capital: Remember to identify, quantify and prioritize the financial and time costs of alignment. For example, acquiring a practice can cost $500,000 to $1.5 million per physician, according to the article.
  • Use a disciplined approach to acquisitions: Be open to saying "no" if the opportunity doesn't benefit the organization or service line.
  • Use structured physician compensation programs: Provide appropriate compensation that is based on fair-market value and productivity to stay competitive, as well as reward physicians for achieving goals.
  • Integrate clinicians in quality: Involve the medical staff to achieve quality goals because they will likely be at the heart of care initiatives. 
  • Manage employed physicians: Closely look at revenue, productivity and costs to assess quality performance, outcomes, market share and satisfaction after the partnership.

For more:
- read the Trustee column

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