Physician Integration – Physician Partnership Priorities: Delegation, Communication, and Negotiation

Virtually all hospital integration initiatives include physicians in administrative capacities (e.g., medical director) and the formation of a physician advisory committee to ensure doctors are included in at least some of the decision-making processes.  While necessary and important, these limited roles must evolve over time into a true partnership, with physicians being embedded in all financial, clinical, operational, and strategic aspects of the integrated network.  Creating an integrated system means combining two types of businesses into a single healthcare enterprise.  Establishing the physician partnership is the fourth and final phase of physician integration and involves sharing control and changing the historical culture for both hospitals and physicians.

This is more difficult than it appears, because hospitals and doctors frequently have very different goals and ways of operating prior to an affiliation.  Although this challenge is not specific to those organizations moving from Phase 3 into Phase 4, it is important that administrative and medical leaders recognize the motivational differences in order to effectively align and move forward.

Major differences in traditional hospitals and physician organizations include:

4Phases_Table1
While the table above may be oversimplified, the point is that not only are these two cultures different, but neither is likely to be successful in managing a financially and clinically integrated healthcare organization alone.  For management, the challenge is to master a new set of operating activities that will address all the inpatient and outpatient care of a larger and more clinically diverse population than hospitals or physician groups have served in the past.  Addressing this larger scope of activity will require collaboration between physician leaders and administrators at all levels of management and governance.

Governance structures that encompass physician partnerships will vary depending on the specific model employed by the hospital, but each model can accommodate sharing responsibility for decisions, including capital and operational budgeting, facility planning, and maintenance of accountability for performance.  Although balancing authority and responsibility is the major concern in sharing control with physician networks, finding the right balance over time is the key priority of management in this phase of integration.

Negotiation and communication skills are needed, along with lots of patience.  Moving forward, senior leadership, both clinician and administrative, must direct the process.  In most cases, the CEO of the system should work collaboratively with the most senior and respected physician leader(s) to maintain momentum, identify additional potential leaders, promote partnership opportunities, and plan for future enhancement of the integrated network.

The challenges in the physician partnership phase are not technical as much as political; that is, how to promote acceptance, collaborative effort, and eventually trust between and among clinical and administrative managers.

If you’re eager to learn about managing all four phases of physician integration, read the Diagnostic available on our Web site.

This entry was posted in Business Planning, Physician Performance, Physician Strategy, Strategic Planning and tagged , , , by Sean Hartzell. Bookmark the permalink.

About Sean Hartzell

Since joining ECG in 2007, Sean has focused on strategic and financial planning, service line development, and hospital/physician alignment with a particular interest in hospital/physician employment transactions. He is a contributing member of the firm’s transaction advisory service line, which focuses on developing and disseminating the firm’s thought leadership in the areas of transaction planning, facilitation, and implementation, and he has published thought leadership pieces and spoken nationally on these topics. In addition to transaction advisory services, Sean has extensive experience in hospital strategic planning, orthopedic service line development, physician compensation plan design and implementation, and physician compensation fair market value analysis. Previously, Sean held business development and finance positions at Inova Health System. He received a master of business administration degree from the Darden Graduate School of Business at the University of Virginia and a bachelor of science degree in operations research and industrial engineering from Cornell University.

One thought on “Physician Integration – Physician Partnership Priorities: Delegation, Communication, and Negotiation

  1. Pingback: A Fond Farewell to 2013. | ECG Management Consultants, Inc.

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