Anesthesia Management: 3 Things Hospital Executives Don’t Get About Physician Integration

This blog isn’t specific for our speciality but it does apply to it.

Physician executives and integration experts share three aspects of physician integration that hospital CEOs and other executives tend not to understand.

Physicians and hospital executives have not always seen eye to eye. Historically, the groups have not been partners — they didn’t necessarily have to be. “Traditionally, a physician was someone who came to a particular hospital and provided services to patients” — and a hospital simply provided that place, says T. Clifford Deveny, MD, senior vice president for physician services and clinical integration for Englewood, Colo.-based Catholic Health Initiatives.

But things have changed, and the movement toward value-based purchasing and accountable care necessitates a closer relationship between the two groups. “They need to be working  together as a team and be collectively accountable,” Dr. Deveny says. In other words, physicians and hospitals need to be more closely aligned and integrated for success. The integration process brings together two very different worlds that often do not completely understand one another.

The following are three aspects of integration that hospital CEOs and other executives tend not to understand, as discussed by Dr. Deveny and other integration experts.

1. Physicians crave input. Hospital administrators and physicians, though they both work in healthcare, were not trained in the same way. This difference in background can led to tension, according to Dr. Deveny. “What isn’t necessarily understood is the true ‘DNA makeup’ of physicians,” he says. “There’s not an understanding of how they were trained.”

Many physicians are entrepreneurial and independent-minded, and they have learned throughout their education to be accountable for their own actions. Many times, however, hospital administrators fail to take this into account and, in those situations, “physicians feel they are a commodity, rather than a valued partner,” Dr. Deveny says.

Jeff Gorke, senior vice president at Coker Group, agrees. “Hospitals integrate them, then forget the physicians have a voice,” he says. “That leads to frustration on the physician side — they go from captain of the ship to swabbing the deck.”

To remedy this, Dr. Deveny recommends hospital executives give physicians a seat at the table and input on the direction of the relationship. “I’ve been conveying that to our senior executives over the last few years, and once they understand that, they are finding physicians to be cooperative…physicians can move mountains” when given the opportunity, he says.

2. Physician practices aren’t hospital departments. “Administrators continue to think running a physician practice is like running a department of a hospital,” says Ellis “Mac” Knight, MD, senior vice president who oversees Coker Group’s hospital operations and strategic services division. “That’s a big misunderstanding.” For instance, billing processes are different for hospitals and physician practices and shouldn’t be done in the same way.

Another similar problem arises with ancillary services. Hospital executives generally want to integrate with a successful — profitable — physician group. But when hospitals acquire and integrate physician groups, they tend to take the ancillary services to the hospital setting — but those ancillary services are usually the very thing that made the practice profitable. “If you remove those in the process of integrating and [then the group] is not doing well, that’s a big reason why,” says Bill Fera, MD, principal and CMO at EY Health Care Advisory Services.

Stripping practices of ancillary services is part of a hospital’s larger drive to run the physician practice like a hospital department, according to Dr. Knight. “[Hospitals] go in and strip down ancillary services to put them on the hospital side and change the staffing structure,” he says. Then, “the practice starts to lose money hand over fist” because of those changes, and “everyone gets mad and blames the others” for this failure.

3. Switching technology isn’t easy. A large component of hospital-physician integration is technical integration, and hospital executives focus on moving new physician groups onto one system quickly after a deal is made. “They want patients to have a shared experience,” Dr. Fera says. However, he recommends not making physician practices change too quickly.

“It’s beneficial to go slow in the consolidation and merging of technology,” he says. Switching a physician practice over to a new electronic medical record or billing system can “cause disruption to a practice going through significant change.” That disruption will negatively affect physician morale and productivity and can strain relationships.

While these are three specific examples, nearly all issues that arise during the integration process can all be resolved if hospital executives do one thing: “Go live in their shoes,” Dr. Deveny says. “Go see how the practice functions.” Physicians can then open up about what is and is not working, and the process builds trust between the hospital and the physician group. This will ultimately lead to a smoother, more successful integration process.