Strategic Initiatives on
Physician-Hospital Alignment
Fact and Fancy
an Insider’s Perspective
Becker's Hospital Review 5th Annual Meeting
Ronald N. Riner, MD
President and CEO
May 17, 2014
“When you come to a fork in
the road – take it.”
- Yogi Berra
“You should never cease from
exploration, and at the end of
all exploring you arrive where
you started and know the
place for the very first time.”
- Little Gidding, T.S. Eliot
Changing Employment Dynamics
Private versus hospital-owned practices, 2002-2011
100%
Physicians in private practice
Physicians in hospital-owned practices
75%
50%
25%
0%
2002
2005
2008
2011
Source: Physician Compensation and Production Survey, Medical Group Management Association, 2011 Survey
Facts
 Majority of physicians and other healthcare providers are
focused on delivering high quality and safe care
 Despite common purposes, many healthcare systems and
hospitals struggle to involve physicians in organizational
leadership, strategy, quality and safety efforts
 Need to get real about finances
 Incentives
 Cost of rules and regulations
 Financial metrics of acquired practices
 Value – from all perspectives is not well appreciated
Rules and Regulations
Top Challenges Reported by US Physicians
91%
90%
88%
84%
83%
78%
77%
73%
Managing shifting reimbursement models with payers
Financial management of their practices
Patient engagement; spending time with patients
Dealing with the impacts of the Affordable Care Act
Keeping up with the latest research
Improving patient care
Using health information technology in the practice
Managing increasing patient volumes
Source: Wolters Kluwer Health, 2013 Physician Outlook Survey
Thursday, February 13, 2014
Rationale
The Employment Carrot
 Port in a storm
 Course of least resistance
 Possible coordinated care
Employed MDs
 Who?
 Why?
 Where?
 What’s it like inside the tent?
 How are they doing?
Key Points
 Where professionals are in their careers
 Exit strategy for older physicians
 Gender
 Happiness is a “relative issue!”
Challenges to Physician Employment
 Employer – employee relationship
 Accountability
 Transparency
 Scientific cynicism
 Engagement
 Credibility of the leadership
 Followership
Leadership
The Concept of Entrepreneurship
Philosophical Concerns
Short Term vs. Long Term
Professional Concerns
 The ability to innovate
 Stifling bureaucracy
 Transformation from profession to a “job”
 Theory vs. pragmatism
 Ideology vs. reality and experience
Loyalty
Finances:
Key:
Not the glue
Purposeful, Challenging Work
 Mission
 Vision
 Values
Issues
Trust
Issues
Talent
A Calling? A Job?
“Go and do likewise.”
Luke 10:37
Hospitals
 View the world from their vantage
point – still!
 Bricks and mortar don’t practice
medicine or deliver care
 Hospital acquisitions lead to higher
prices and the amalgamation of
additional cultures
Clinical Integration
 What’s the objective?
 In many instances just buying revenue
streams or attempting to guarantee a
distribution channel
Nota Bene!
 Hospital and medical practices
are different businesses
 Different metrics
“It takes an endless amount of
history to make even a little
tradition.”
- Henry James
Key Question
Are Mayo Clinic, Cleveland Clinic
and the large staff models
applicable to your environment?
Importance of Culture
 Decades to build
 Often absent in small business other
than in presence of founders
 In established and stable systems,
reflective leadership and training
Management Motif
Professional Service Firms
Plant Management
Medical practice
Factories
Accounting
Hospitals
Law Practice
Hotels
Management: Cultural Difference
Medical Practice
Hospital
(Plant Management)
 Values autonomy, trained to
work independently and take
ultimate accountability
 Trained to delegate and work in
groups, embraces the collective
mission
 The need for quick decisionmaking – sometimes life and
death in the balance
 Deliberate decision-making
 Resistant to hierarchy
 Hierarchy is key to success
 Trained in management, social
sciences
 Trained in biomedical sciences,  Respects top-down hierarchy
clinical expertise
when making decisions
 Seeks consensus in group
decisions
Adapted from: Nathan Laufer, MD, “The employment of doctors by hospitals-indentured
servitude or practice salvation?”
Leadership Skills & Management Motifs
Different
Professional Service Firms
Plant Management
Medical practice
Factories
Accounting
Hospitals
Law Practice
Hotels
Transferability
Medical
Practice
Hospital and
Health System
Current Lexicon
Appropriate use
criteria
Evidence-based care
Outcomes
Value
Quality
= Cost
Readmissions
Patient/associate/
physician satisfaction
Leadership
capabilities
Value
Professional Perspective
Supportive,
Purposeful and knowledgeable Trustworthy
systems
meaningful work colleagues
Quality focused
Degree of autonomy
knowledgeable support staff
Satisfactory compensation
Credible leadership
Value
Quality
= Cost
Learning environment
Quality of life (balance)
Value
Patient’s Perspective
Meeting expectations
with outcomes
Value
Physician
communication
Quality
= Cost
Easy access
Friendly, caring staff
Reasonable cost
Value
Hospital/Health System Perspective
Highly productive
Favorable managed care clinicians
Positive revenue streams
and payor relationships
Coordinated (? integrated)
care
Value
Quality
= Cost
Safe, quality focused care
Market leader status
“The next morning the sun was
behind a cloud, but they started on,
as if they were quite sure which way
they were going.”
“If we walk for enough” said Dorothy,
“we shall sometime come to some
place, I am sure.”
- The Wonderful Wizard of Oz, L. Frank Baum
Fallout if Done Poorly
Fallout for Physicians
Fallout for Payors
Fallout for Hospitals
Fallout for Patients
Concerns That “You” Should Worry About
 Digital world realities
 The importance of “thick data”
 Burn out
 Loss of excitement and professional
satisfaction
 Quality
 For patients
 For the institutions
 For those providing the care
 For yourselves and your families
Leadership
Focusing on Results
“But you have not yet told me
how to get back to Kansas.”
- Dorothy, The Wonderful Wizard of Oz
Leadership
The Complexity of the Task
"Do you think Oz could give me courage?“
asked the Cowardly Lion.
"Just as easily as he could give me brains,“
said the Scarecrow.
"Or give me a heart,“
said the Tin Woodman.
"Or send me back to Kansas,“
said Dorothy.
- L. Frank Baum
The Wonderful Wizard of Oz, Author
Leadership
 Adaptive leadership
 Focused on building skills needed for new know how
 Different than leadership charged with
organizational challenges
 The power of collaboration
 Long-term focused
Leadership
 Innovation
Evidence-based medicine
Best practices
Guidelines
Why People Fail to See the Changes Occurring
 They choose to ignore or accept
changes in the external
environment
Issues
 Alternative payment mechanisms
 Transformation of place of delivery
of health services
 Who should deliver care
 The importance of an energized,
creative, quality-focused healthcare
workforce
“It was a lie but he believed in
telling lies to people. Truth
telling and medicine just didn’t
go together except in dire
emergencies, if then.”
- Mario Pruzo, The Godfather
Future
 Think value
 Do you need to own all? Should you? Can you?
 Understand the business metrics and leadership
requirements of the different businesses
 The talent is the asset:
 Science and business
 Credibility
 Experience
 Leadership focused
 The power of credibility
 Quality and safety
 Multidimensional
The Brass Ring
The Brass Ring
Harmony
A Brief History of Medicine
2000 BC “Here, eat this root.”
1000 BC “That root is heathen, say this prayer.”
1850 AD “That prayer is superstition, drink this potion.”
1940 AD “That potion is snake oil, swallow this pill.”
1985 AD “That pill is ineffective, take this antibiotic.”
1989 AD “Managed care will correct all that ails us.”
1995 AD “Managed care could be dangerous.”
2000 AD “Antibiotics are artificial; here, eat this root.”
2010 AD “Value is finally upon us . . . as are monumental rules,
regulations, requirements …”
2014 AD “Obamacare is 4 years old … here, say this prayer with this potion!”
“The comic and the tragic
lie inseparably close, like
light and shadow.”
- Socrates
“In the end, only three things
matter: how much you loved,
how gently you lived, and how
gracefully and effectively you let
go of things not meant for you.”
- Buddha
Somewhere over the rainbow . . . . .
. . . . . an unending journey