William F. Jessee Talks Physician-Hospital Alignment

Joe Cantlupe, for HealthLeaders Media , January 12, 2012

3.Hospitals must examine the overall fiscal picture

When hiring physicians, hospital executives should examine an array of fiscal possibilities. That includes benchmarks, payer-mix incentives, and total revenues collected. In addition, total revenues collected as well as efficiency of the physician practices should be reviewed. Finally, specialist referral patterns and potential litigation issues as well as physician performance should be evaluated, Jessee says. And they must eyeball the fine print: Does a doc have a potential conflict such as ownership in a pharmaceutical company?

"Before purchasing a practice, be sure you understand how cost-effective its physicians are," Jessee wrote in a report for Integrated Health Strategies. "If their cost-per-case (usually driven significantly by physician choice of drugs, supplies, devices etc.) is higher than the hospitals' revenue for those cases, additional volume will only make the problem worse."

4. Physicians must evaluate their goals

Jessee says that physicians must forsake short-term gains and be flexible in relationships with hospitals.

As physicians, "you are obligated to change your mode of decision-making. It is no longer management who will decide what is best. As a doctor, if you want those (management) guys to be on your side, and for an integrated system to work, you've got to be part of the decision-making process."

Over the years, "docs have historically done a very good job of playing one hospital against the other," he says, noting that a trustworthy relationship is essential.

Indeed, for both doctors and hospitals, it is essential that they really do their homework before entering an integrated model to avoid regrets and ultimately asking consultants like Jessee, "Now what do I do to get out of this mess?"

Underlying it all is the need for foundational trust.

"Building a trust relationship and learning the behaviors of one another are what either firms up a relationship or it can destroy trust. It's a lot easier to destroy trust than to build it."

"It's a matter of getting physicians to realize that if they see their future as having a closer relationship with a hospital—and more and more docs are seeing that—they have to all be trustworthy partners," Jesse says.


Joe Cantlupe is a senior editor with HealthLeaders Media Online.
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