ACOs Shine Spotlight on Physician Employment

Carrie Vaughan, for HealthLeaders Media , May 10, 2011
  • Realize that you are no longer the boss. You will now have to comply with corporate policies and HR standards.
  • Review separation and termination policies. Joining a group is a lot like getting married-easy to do, but tough to undo.
  • Understand the value of your practice in today's market. There is no true goodwill anymore ­associated with practices because if that doctor is not there, there is no income stream or profit stream to assign to goodwill, explains Brett Hickman, a Chicago-based national leader of the health industries strategy and planning practice at PricewaterhouseCoopers.

Making physician employment work
These elements are key to successful physician employment:

  • Restructure governance. Give physicians a voice and role in the organization. "Nine times out of 10 when these things fail, leadership at institutions say, ‘We got the financial deal done and took care of them, and they are still unhappy,' " says Brett Hickman. But those organizations didn't have an effective way of engaging physicians in the leadership of the institution, he says.

  • Realign financial incentives. Physicians should actively participate in the success of the institution and legally be accountable for quality, efficiency, and access, says Hickman. For example, Catholic Health Initiatives (CHI) plans to change its payment model to focus more on quality, population management, and reduced hospitalizations rather than office visits and procedures. Before physicians come on board, they need to understand how the current compensation model differs from theirs and where CHI is ultimately going, says Stephen Moore, senior vice president and CMO.

  • Engage physicians. The physicians-primary care included-have to be involved in establishing the care delivery process or the institutions are going to be at risk, Hickman says. "You have to make sure the physicians are engaged in [managing patient care] or they won't change their behavior to deliver care in a more cost-effective way."


Carrie Vaughan is a senior editor with HealthLeaders magazine. She can be reached at

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