Best Practices: Balance of Power
Features
Written by Amanda Gaines   
Sunday, 01 June 2008
Best Practices: Balance of Power - Health Executive - RedCoat Publishing
Viewing physicians as equal partners enables hospital administrators to plan for the future and ensure success.
What do a director of physician services, a hospital vice president and CMO, and the president of a management-consulting firm have in common? A firm belief that for a hospital to be financially and clinically successful, the administration should treat its physicians as partners. And they’re in good company.

In the introduction to the 2007 edition of Press Ganey’s Hospital Check-up Report—Physician Perspectives on American Hospitals, CEO Dr. Melvin Hall wrote, “Because physician admission and referral patterns drive the financial health of the hospital, physicians are critical to protecting the hospital’s business. Hospitals need to listen to this important group of care providers to fulfill their mission to provide quality care to their communities.”

But even the most physician-oriented hospital administrator can’t be all things to all people, which is why Medical City Hospital in Dallas, Texas, a physician-founded hospital with more than 1,150 physicians, has a dedicated director of physician services.

When Stephen Lagrone was hired for the position in 2006, he knew he was coming to an organization that considered its physicians integral players in its overall success. What he needed to do was strengthen the bridge between the two to ensure that as the medical staff grew, it would understand the administration’s dedication to physician involvement.

“I engaged the physicians, introduced myself, and let them know I would be their liaison for any issue, concern, or problem to facilitate corrections or answers to their needs,” said Lagrone. “Because physicians are key players in the healthcare system, the administration’s role is to make sure they have an efficient, state-of-the-art hospital to work at. Physician input is integral to our future development.”

Physicians at Medical City participate in a variety of operational areas, including a monthly medical staff committee meeting where operational and development issues are presented for physician feedback. Physicians also have a strategic planning committee of between 50 and 70 physicians that meets formally and informally throughout the year to discuss the hospital’s current and future strategic plans.

“If the administration did strategic planning separate from the medical staff, it would be difficult to get physician buy-in,” said Lagrone. “It would also be hard to establish a partnership without directly involving medical staff from the start.”

Press Ganey agrees. According to the 2007 report, physician satisfaction regarding hospital operations is high in patient care and ease of practice but significantly lower when it comes to relations with administrators. Without strong satisfaction in all categories, it’s easy for the other scores to slip as well. “As physicians become more and more experienced with hospital operations, they often report higher levels of satisfaction,” wrote the report’s authors.

Medical City is currently expanding its operating suites, and the number of available suites will decrease during the initial construction phase. The administration had planning meetings with its general surgery medical staff right from the beginning, explaining the hospital’s needs, looking at the current utilization data, and showing that the hospital needed to expand to prepare for the future. As a result, physicians understood and were willing to work side by side with the administration to ensure a smooth transition.

“The physicians understood and recognized the need to expand, and we showed them how the challenges would pay off to ensure a more efficient operating area for them to work,” said Lagrone.

Leveraging overlap
For Scott Levy, currently vice president and chief medical officer at Pennsylvania-based Doylestown Hospital, becoming a physician liaison was more of an evolution than an appointment. When he started at the hospital in 1990, it was as a physician with a practice in nephrology and hypertension. When his practice outgrew its space, Levy began looking for ways to develop a real estate deal that would be beneficial to both the physicians and the hospital.

During his search, Levy encountered other large physician practices that had outgrown their spaces, but they were having difficulty maintaining economic viability because of shrinking reimbursements. “I looked for a way for physicians to develop a revenue stream rather than just taking care of patients,” he said. “We weren’t interested in being the tenants for a landlord who would make money over a stable physician base.”

Although Levy’s bias was toward physicians and not on how a joint real estate venture could benefit the hospital, “it’s two sides of the same coin,” he said. From the physician standpoint, having a strong, hospital-based practice close to the hospital means referral patients won’t have to travel far—a good marketing tool. For the hospital, partnering with physicians on a medical office building strengthens its physician base and sends a message to other community doctors that it’s willing to help physicians.

“Originally, the hospital saw the cost of building a medical office facility as high when there were other things it wanted to do with its capital, but the hospital needed more space,” said Levy. “By doing a venture with a land lease to a group of physicians that allowed the physicians to build it and have an equity ownership of the building, both sides benefited.”

Doylestown Pavilion opened at 100% capacity, produced an almost 20% ROI after the first year, and is located on the hospital campus. Two years after it opened, Levy was appointed vice president and chief medical officer. The hospital wanted someone who could handle a relationship with the administration while understanding the impact that administrative decisions would have on patient care and the physician community. Nearly five years after his appointment, Levy still views his main role as sharing with administration the views of physicians in the trenches.

“Physicians see the world from one perspective: as a provider of care. With help, physicians see that the hospital’s role is not the same, but it doesn’t have to be antagonistic,” Levy said. “The more you can take a broader view, the better insight you have on how to make your hospital run smoothly. There is a huge amount of overlap between the positions—you just have to learn how to leverage it.”

Equal partners
Although the administration/physician partnership worked well at these two organizations, it’s not always that easy. Barry Calogero, president of management-consulting firm Tefen USA, said physicians sometimes lack the awareness that their individual practices are creating challenges for the hospital. But it’s not entirely the physicians’ fault.

“Hospitals are sometimes reluctant to push physicians too hard for fear they’ll take their business elsewhere,” said Calogero. “Administrators need to realize the more they make their financial and capacity situations visible, and the more they treat their physicians like partners, the more the physicians are willing to come to the table.”

The key, Calogero said, is to ensure that physicians and administrators appoint strong executive leaders who are willing to participate in meetings and commit to understanding what’s happening on both sides. There also must be a burning platform, he said, something that ties the concerns of the physicians and the administrators together, so each side understands the impact it’s making and how it can change to benefit the organization as a whole. “Most hospitals do a poor job of involving physicians, but they are a major part of the delivery system,” Calogero said. “They can’t be ignored.”

At Doylestown Hospital, the real estate partnership between physicians and the hospital has made it impossible to ignore the other side. “When we have a meeting, hospital administrators and physicians are side by side, all as shareholders,” said Levy. “There is a lot of collegiality across the organization as a result.”

In Texas, the development of a physician liaison enabled Medical City Hospital to develop physician satisfaction surveys specific to the top five concerns of its medical staff: quality improvement, efficiency of operations, hospital consistency of care, administrative responsiveness, and administrative communication. The surveys, which are informally conducted throughout the year, give the hospital a chance to be proactive in incorporating physician comments and directions into its strategy.

“Hospitals that struggle with improving their physician relationships or worry about having a hospital that is too physician-oriented may not perceive their physicians as partners,” said Lagrone. “If the focus is more on internal planning and having physicians as separate partners, you’re not engaging physicians as true partners. It’s important to have open channels of communication and consider physician feedback in a timely fashion.”
 
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