Incentives are now strong
Favorable incentives for both sides are necessary in providing high-quality care. The relatively recent move by commercial plans and government payers toward risk-based contracting attempts to ensure that outcomes are rewarded, not volume of service.
So while quality of care is important, physicians are now seeing benefit with hospitals on quality and safety initiatives and cost-control programs because their financial fate is more closely aligned to hospitals' fiscal well-being, says Michael Murphy, the executive vice president of heath networks at Trinity Health in Novi, MI. Murphy works with physicians in senior leadership roles at Trinity to execute the health system's clinical integrated network strategy as well as its accountable care organization strategy, which work in tandem.
Trinity, which owns 35 hospitals and manages 12 others, also has a vast network of outpatient, long-term care, home health, and hospice programs in 10 states, which means the benefits of cooperation accrue directly to the health system in most cases. That's not always true in situations where the pieces of the care continuum are more disconnected.
Murphy says many times in the past, promising collaboratives have found it difficult to get coordinated care because the incentives have not been aligned. That meant cooperative efforts that may not have had positive results right away were prematurely abandoned, or that well-meaning attempts to improve care handoffs, for example, were entered into halfheartedly. As soon as a more pressing issue came up, they might have been tabled. No more.
"What's great is the payment system is catching up," says Murphy, whose organization has had a head start on some innovative collaborative efforts, such as coordinated treatment of patients with chronic disease. "That question has been debated forever," he adds. "Do you put the financial incentives first to drive behavior, or do you create a model that is more focused on quality, which attracts the payers?"
Now both can work at the same time because of the increasing emphasis employers and commercial insurers are putting on delivering measurable high-quality, safe, and coordinated care—and they are backing up that emphasis with better reimbursement. If the targets are met, the incentives are delivered. And all of the agreements are covered in a contract.
Still, "for these arrangements to work for the patient and the employer, there needs to be joint risk-sharing" between physicians and hospitals, says Jeff Wasserman, vice president of strategy and executive leadership services with Culbert Healthcare Solutions, a consultancy based in Woburn, MA. "It's hard to share risk if you can't work cooperatively."
Who's in control?
Many conversations with healthcare senior leaders begin or end with some version of the statement, "If only we could get our physicians to ..." This thinking is not suited to the types of seismic changes facing healthcare today that require not only the physician's cooperation, but also his or her financial commitment. It also suggests a paternalistic view of the relationships between hospitals and physicians.
The biggest change that has to occur is finding new ways for hospital and health system leaders to cooperate with physicians. A second and no less important driver is simple economics. Physicians who in the past have seen themselves as being in competition with the hospital are now finding that reimbursement rule changes are making it more difficult to remain independent, says Wasserman.
In fact, he predicts that at some point in the next two years, about 50% of primary care physicians will be employed by hospitals, and "specialists will follow behind in a couple of years."
One might think that hospitals and health systems will be able to leverage physicians into following the protocols necessary for achieving performance targets in the hospitals' commercial contracts, not to mention avoiding penalties and sharing in incentives offered by CMS under healthcare reform. But employment does not ensure that doctors will be willing partners in improving care. An important hurdle is encouraging and requiring physicians to agree to hold themselves to certain standards.
"If you don't develop a genuine way to make physicians feel just as important as the hospital, it's hard to make the progress that needs to occur," Wasserman says.
That means giving leadership roles to physicians, who are expected to set their own standards by which the hospital will hold them accountable. But both sides have to give up some control, says Trinity's Murphy.
"We believe strongly that only collaboration will be successful in the future, so we all have to give up a certain amount of control."