June 28—As hospitals prepare for the shift to value-based business models, a recent HFMA survey of healthcare CFOs shows the growth in physician employment is expected to continue, particularly as hospitals work toward strengthening capabilities related to care coordination, population health management, performance measurement, and more.
The survey, sponsored by McKesson, gained input from 139 healthcare CFOs regarding their organizations’ physician affiliation strategies to assess the impact of changing care models on physician employment.
Physician relationships will be critical to hospitals’ success in an accountable care environment, according to the CFOs surveyed. Nearly one-third of future physician affiliation strategies will be around co-managements, directorships, and other professional arrangements, survey results indicated.
Taking a Closer Look
The role of physician employment in improving care coordination, market share, and referrals will be key benefits of this physician affiliation strategy, particularly at a time when few hospitals have the structure, infrastructure, or capabilities to use data to manage population health within an accountable care environment:
- Forty percent of CFOs surveyed stated their organizations are “not at all prepared” to tackle population health management within an accountable care environment, and 53 percent believe their organizations are only somewhat prepared to do so.
- Only 14 percent of the CFOs surveyed indicated that their organizations are “very prepared” to manage care coordination under value-based business models, and 23 percent do not believe their organizations are prepared to manage care coordination at all.
- Although survey respondents reported an increase in collaboration with their physicians to improve care coordination and efficiency, only 20 percent believe their organizations are “very prepared” and have the necessary infrastructure to support quality and outcomes-based management.
- Seventy-one percent of healthcare CFOs surveyed believe their organizations are “somewhat prepared” to manage performance measurement and benchmarking within an accountable care environment, and 14 percent feel “very prepared” to do so.
Care coordination is seen as the chief benefit to physician employment: Seventy-two percent of the survey respondents cited improved care coordination as the greatest short-term benefit of employing physicians, and most CFOs surveyed expect to begin reaping those benefits approximately two years after employment. However, fewer than one-fourth of CFOs surveyed expect physician employment to result in a positive ROI for their organizations after two years of employment.
The survey also confirmed that physician compensation will become increasingly value-driven. According to the findings, 77 percent of current physician agreements are based on productivity or volume. In the future, cost-of-care or efficiency-related incentives in physician agreements are expected to grow dramatically from 16 to 67 percent. Similarly, quality-related incentives are expected to increase from 65 to 85 percent.
“The survey demonstrates the shift from the ‘fill your beds’ mentality of the past based on fee-for-service,” said Janice Wiitalia, director of research for the HFMA, who led the research project. “Everyone is starting to realize that the focus in a value-based environment is on keeping patients healthy, not the volume of care provided.”
Publication Date: Friday, June 28, 2013