Hospitals enjoy a tremendous new opportunity with the prospect of developing accountable care organizations (ACOs), as outlined in the Affordable Care Act. The goal with ACOs is to integrate hospitals and physicians by holding them jointly responsible for quality and cost of care.

Hospitals face a substantial challenge, however, in aligning clinical and financial goals without undermining quality of care. Indeed, many healthcare providers believe that quality of care and cost of care are conflicting ends of a spectrum-success with one is at the expense of the other.

Yet achieving ACO status and a high level of overall performance depends on absolute clinical-financial alignment, which begins with successful physician integration across the care continuum. Because physician decisions and actions impact 70 to 80 percent of the hospital cost structure, leaders need to address the question, "Do we really understand how to engage physicians to align their interests with ours?"

In an article appearing in the February issue of hfm, Jay Reddy, founder and CEO, PSCI Solutions, Frisco, Texas, describes one tool that hospital administrators can use to engage physicians in an enterprisewide effort to improve quality while containing cost: the physician value index.

Publication Date: Monday, January 03, 2011

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