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The Task of Creating a Physician Relationship Strategy
Author: Kriss Barlow, RN, MBA
This article has been updated by the author to reflect 2009 trends and market dynamics.
Professionals who have spent their careers in healthcare are familiar with the unwritten rules of hospital-physician relationships. Many elements of physician strategy are driven by these rules. For example, some physicians assert, "The hospital should not get involved in patient care decisions." Hospital wisdom conversely forces the statement, "Most physicians aren't very good at business decisions." In the past decade, new unwritten rules for health system-physician relationships have emerged. For example, "Physician's who are employed aren't willing to work hard." Or, the hospital is unwilling to embrace my need for efficiency, so I need options like my own ambulatory center. To the outsider it must seem a bit odd that the parties work together, yet do not partner well.
Business initiatives are often at the core of relationship tension. Tough decisions made over the last five years have heightened the disparity. Employment and joint ventures have forced new relationships. Many of these partnerships are business based rather than mutual respect or trust based. Hospitals were nervous about market share and physicians were nervous about security within the private practice model. A wise physician once told me, "Everything is fine until you mess with income." There is no doubt that the dollars in healthcare are on everyone's minds. The complexity of who controls the dollars and how they will be disbursed heightens an already insecure system.
It would be naive to assume there is a "quick fix." However, new strategies may contribute to communication and referrals within 90 days of initiation. Long term there can be significant changes replacing the current "rules of the road."
Systematic Approach
What is working within the today's physician—hospital organizational structure? Any process begins with an honest examination of what is and should be in place.
The Current Process
Determine how current physician strategy considerations are being made. Consider who is making the decisions. Sometimes there are several leaders involved in narrowly defined strategies each calling on the same physician.
Track strategies and results over the last two years to determine your system's patterns. Judge whether these endeavors have been proactive or reactive. Determine if the same physicians benefit from a large percentage of these strategies.
Evaluate the findings and reports from liaisons and physician managers. Look at past medical staff plans and requests. Honestly evaluate how many requests surfaced, how many were fulfilled and how these needs were met.
While subjective, the inspection is telling. It is reflective of the system in place for managing physician needs and wants, the communication process and perceptions of what the system should be providing.
The top leadership has generally guided physician strategy. While experts in global thinking, they may not consider the infrastructure required to support the day to day details of physician strategy.
The set of basic activities can be quickly assessed using the model below. Evaluate who is responsible in your organization. The sample model below is not indicative of what should be.
The internal analysis can be a humbling experience. While there are often a multitude of ideas, the continuity for implementation may be undefined. The analysis will highlight the vulnerabilities and allow a clean slate to move forward. Once the history is understood, a new roadmap can be defined.
Sample Model: Physician Strategy Accountabilities
| Initiative | Administration Responsibility | Management/Implementers Responsibility |
|---|---|---|
| Create an overall physician strategy | X | |
| Seek the right partnership and JV opportunities | X | |
| Using a MSDP, finalize the recruitment plan | X | |
| Formalize assessment; gather and evaluate medical staff data | X | X |
| Forecast expectations | X | X |
| Align tools and techniques to retain existing referrals | X | X |
| Define business strategy for recruitment | X | |
| Focus physician relations to grow target referrals | X | |
| Integrate plans, involve quality, clinical and medical education | X | |
| Evaluate the effectiveness | X | X |
| Internally coordinate and communicate | X |
Developing the Plan
Successful organizations have used a systematic approach to design, develop and enhance physician strategy. There are nine fundamental steps in this approach. Taken in order, they allow the health system to give physician strategy the focus it deserves, increase the efficiency of the efforts and give back measurable and accountable results.
- Assess the current internal culture.
- Internal willingness to change
- Perceptions of current physician strategy
- Ability to manage ineffective physicians and leadership
- Referral and admission status (the dollars)
- Evaluate the physician climate within the community.
- Business ventures— frequency, success and perceptions
- Physician recruitment, access to quality physicians
- Competition in the market, percentage of owned practices
- Market share trends
- Clear identification of differential advantages for physicians by system
- Analyze the options for change. Looking at the internal and external environment and what will be successful long— and short—term.
- Practice ownership expansion, joint ventures, partnerships with key physicians
- Structures to assure two—way communication
- Measurable expectations for enhancing referrals from key physicians
- Leadership development for physicians
- Opportunities to attract new physicians and additional referrals for the system
- Select the options which are in concert with the health systems' mission and vision.
- Decisions to own, partner or establish new clinics
- Community perceptions of the hospital/health system
- Confirm the long—term goal and define the larger strategies that will be required to move this process forward.
- Decisions to change acquisition strategy require significant time and energy; these should be "pulled out" and dealt with separately
- The organization can move forward with tactical planning for enhanced communication and referral development separately
- Include internal structural decisions.
- Define the most effective structure to optimize outcomes
- Complete a structure audit to determine the type of people needed, how to measure their impact, how they will be compensated and who will supervise the process
- Develop short—term goals and strategies with measurable, accountable decision points and process.
- Consistent tactical approach offering physicians a mechanism for solutions
- Consistent tactical approach assuring the health system has a defined process for managing physician relationships, service offerings and measurable outcomes
- Evaluate and delineate the budgeted resources, structures, technology, people and compensation systems.
- Dollars for this strategy should be consolidated to determine total costs. Evaluate those elements that cost, keep dollars or grow the revenue.
- Assessments will need to be completed to determine job structure; recruitment needs and establish accountabilities
- Commit to designing the plan, implementing the plan and evaluating the plan. Strategy will fall short if there is not commitment to working the plan long—term.
- Commit to ongoing evaluation
- Determine objective criteria monitoring trends in revenue, communication and time efficiency from the organizations perspective and from the physician's perspective
- Establish criteria expectations at the onset, determine how the criteria will be measured, set the frequency of evaluation and decide how changes will be implemented
The Game Plan
These steps become the "game plan" for moving forward. Focus shifts to providing a framework for business decisions as they relate to the physician strategy. Each system will face issues unique to their own market however; there are four issues that will likely appear for most progressive health systems.
Issue #1: Leadership Turf
For many organizations, physicians are held in high esteem. As a result, the priority of these relationships is assumed by the decision makers. It is a fact that someone has to own and be accountable for the relationship or they won't get all the attention they need. Leadership is often guilty. Upper management needs to work with leaders to support communication and position new opportunities within a system. A representative can work as an agent for the administrative team to position the health system's status, offer enhanced relationship opportunities and communicate. The representative needs the support of leadership in order to offer effective solutions and effect change.
Issue #2: Pressure to Buy without Cost Analysis
Physician initiatives are not without a price tag. Purchases and collaborative business strategies are significant investments. The physician strategy requires either a reallocation of resources or new resources. The need to move forward must be clearly identified.
Issue #3: There is No Time to Plan
Hospitals and health systems have become known for the company they keep and the strategies they deliver. Think of your market. Do you label systems or groups by their management style? For example, "They buy practices," or "They rely on the 'big group' for primary "care referrals." Once your pattern is established, it becomes both expensive and difficult to change. Cost, time and efficiency are lost when strategies keep changing and new messages are communicated to the marketplace. Changing the course requires significant internal resources and time.
Issue #4: The Internal Sale
The decision to embark on a new strategy necessarily impacts a multiplicity of functions within the health system. While a "silo mentality" is alive and well within many health system departments, the physician's impact crosses many boundaries. Coordination is essential.
Assumptive behavior takes a huge toll because internal communication and buy—in is not given the attention it needs. Objectivity is required to step forward. Tools can be used to remove the emotion from the process including, structure audits, medical staff development planning.
Conclusion
As we move forward with physician strategy, several benefits surface from the use of a defined approach:
- The process of internal and external analysis identifies issues before there is an implosion of implementation problems.
- Group—based strategic decisions are likely to reflect the best available alternatives.
- Implementation will improve through better understanding of the process required.
- Communication will focus on achievable results.
- Measured accountability will guide the momentum for strategy enhancement and redesign.
A positive relationship with physicians is the goal. Defined strategies provide a methodology for defining and measuring mutual gain. Innovative health systems are developing proactive approaches. Looking to the future there will be significant challenges in the business of healthcare. Physicians, hospitals and health systems will be more effective in they can work together.