From Good Intentions to True Alignment
Hospital-physician partnerships ease the financial burdens of private practice while helping hospitals save costs and attract patients.
By Sarah Fister Gale | Print the pdf of this story
It’s a tough time to be an independent physician.
In addition to a tight economy, physicians must juggle patient and practice needs with the paperwork and red tape that determines how much, when—and if—they get paid. As a result, many physicians are taking advantage of partnership opportunities with local hospitals where they can tap into the infrastructure and resources that forward-thinking administrators have to offer. Beyond financial benefits, these partnership opportunities can deliver value to a physician’s patients, practice, and reputation.
Hospitals also stand to gain additional value by creating closer relationships with physicians. Through these partnerships they can implement programs to improve patient outcomes, lower costs, and raise the profile of the facility within the community—substantial benefits in light of intense competition and tight margins.
No One Size Fits All
“My philosophy is that these partnerships are not only important, they are essential to survival,” says Dana Kellis, MD, senior vice president of medical affairs and chief medical officer of PinnacleHealth in Harrisburg, Pa. “Physicians are under economic and regulatory pressure, it’s a hard time to survive in the old model where the physician is on one side and the hospital is on the other.”
Kellis notes that hospitals are under their own set of pressures to deliver better care at a lower cost; doing that requires a stable staff of experienced physicians.
“Physician manpower studies show that we are in the midst of a worsening physician shortage,” he says. “If we don’t partner with doctors, we won’t be able to fulfill our mission to ensure the community has consistent access to quality health care.”
Economic uncertainties and payment changes such as pay for performance create incentives for physicians and hospitals to forge innovative partnerships. Kellis says PinnacleHealth, a health system comprised of two acute care hospitals with a total bed count of more than 600, has multiple partnership programs with physicians that range from employment opportunities and joint ventures to real estate deals, information system and database upgrades, and contracts for clinical services.
PinnacleHealth also benefits from a gainsharing program with its cardiologists, through which the hospital and physician team set targets to reduce costs while increasing patient health. When the targets are achieved, PinnacleHealth shares the profits with physicians.
As of early 2009, the program has resulted in $7 million in savings on cardiac-related medical devices—while maintaining positive clinical outcomes.
“No one size fits all,” Kellis says of the partnership solutions PinnacleHealth invests in. “Each physician or medical group has different needs. We try to hammer out plans to meet those needs.”
He’s also quick to note that these projects aren’t purely altruistic. PinnacleHealth understands the financial and professional value that physicians bring to the health system.
For example, as part of one of its biggest partnership investments, PinnacleHealth is working with physicians and an outside firm to develop a medical office building on the system’s site.
“Physicians need to have good office space close to ancillary services,” Kellis points out. “This project helps the physicians secure stable costs for office space, but it also gets them invested in living professionally on our campus.”
Many of PinnacleHealth’s other partnership projects are on a smaller, less cost-intensive scale.
“More often than not they involve a network of support systems, such as offering physicians help with recruiting and training new hires,” he says.
These kinds of partnerships take advantage of the hospital’s existing technology and internal infrastructure to support physicians without requiring a major investment.
Administrators work to develop trust between the health system and the physicians. That level of trust is critical when it comes to building bridges with physicians, who are often suspicious of partnership programs developed by administrators, Kellis says.
PinnacleHealth passes all of its physician-related projects past legal counsel to ensure they comply with the laws and regulations governing its relationship with physicians, Kellis says.
He notes that because PinnacleHealth’s CEO is also an MD, physicians may be more trusting of his decisions.
“Having an MD as CEO brings credibility,” Kellis says. “He knows the language of physicians and knows the issues they face. It also helps him represent the physicians on the business side.”
Quality Care Pays Off
Like PinnacleHealth, Pennsylvania-based Geisinger Health System has also built successful hospital-physician partnerships. Geisinger, which is a physician-led integrated healthcare organization with 40 community practice sites, offers its own health plan.
“From an organizational standpoint, we offer a unique advantage,” says Howard Grant, MD, executive vice president, chief medical officer. “There are no ambiguities. As a whole, we dedicate ourselves to the benefit of the patient and everyone in the organization.”
Geisinger has 800 employed physicians, and the hospital’s health plan covers 220,000 members. Because Geisinger has its own health plan, delivering better clinical outcomes that lower expenses results in cost savings to the hospital.
To support that model, all Geisinger physicians receive a base salary with further incentives given when they achieve goals around quality patient outcomes, patient satisfaction, and productivity.
One example of a hospital-physician partnership at Geisinger is the ProvenCareSM program, a model of aligning payment with optimal care. The program is designed to make it in the physician’s financial interest to deliver care that results in the fewest complications and readmissions.
Under ProvenCare, Geisinger’s physicians are encouraged to do it right the first time—instead of having perverse incentives that operate in fee-for-service care, Grant says.
There have been financial positives: Since introducing the ProvenCare program for coronary artery bypass graft (CABG) surgery in 2006, the average length of stay for CABG patients has dropped from from 6.2 days to 5.7 days, and 30-day readmissions dropped 44 percent from 6.9 to 3.8. Geisinger has also seen a 16.9 percent increase in the contribution margin.
“This improvement benefits patients, but it also translates to financial and professional benefits for physicians and staff,” Grant says. “When we commit to the well-being of our patients first, the organization is always the beneficiary.” Geisinger launched ProvenCare CABG three years ago, and since that time, it has added hip replacement services, cataract surgery, percutaneous coronary intervention, bariatric surgery, low back pain treatment, and perinatal care.
He notes that all Geisinger physicians receive a base salary and earn further financial incentives when they achieve goals around quality patient outcomes, patient satisfaction, and productivity.
Following up with Patients
Geisinger also supports physicians by placing dedicated nursing personnel in primary care sites who support physicians in their care of chronically ill patients. These nurses follow up with discharged patients, making sure they get transportation to and from follow-up visits, get their prescriptions filled, etc.
The nurses have also taken on many administrative duties, such as sending records to the appropriate follow-up care sites.
“The nurse becomes part of the practice,” notes Thomas Graf, MD, chairman of Geisinger’s Community Practice Service Line in Danville, Pa. Graf was a champion of this partnership program among his peers at Geisinger. “It creates a total management solution for the patients as they transfer from one care center to the next because that’s where the errors often occur.”
Graf sees the program as adding a significant advantage to his practice. “I have a highly skilled new team member who I can count on to get things done,” he says. “It allows me to be proactive with my chronically ill patients so we can keep them well.”
And that’s exactly what has happened.
The program began with two sites in 2006, and has since expanded to 20. Since the beginning, Geisinger has seen a 20 percent to 40 percent decrease in readmission rates among chronically ill patients.
However, getting the physicians to embrace this program wasn’t easy. The program initially required extra time on the part of the physicians to establish a formal strategy for communicating with their dedicated staff about the needs of each patient, which can seem like a burden for a physician who is already overbooked.
It also took time and resources to develop the program’s infrastructure and to identify and train the nursing staff to support the physicians throughout the program.
“It’s difficult to get physicians to change the way they practice after 30 years,” Grant says. “It takes time to write protocols for nurses and to communicate with them, and that’s time that physicians are not reimbursed for in the traditional sense.”
Graf admits that about half of the physicians were skeptical of participating in the program because of the additional work.
“But they soon realized that once the case manager was able to dig into their cases, it became less work, and it was easier to do the right thing,” he says. “They also recognize that they are providing better care, and that the patients and their families are more satisfied.”
To give physicians added incentive to try the program, the Geisinger health plan offered stipends to those physicians who participated in the pilot programs.
Technology that Pleases
Mercy Medical Center, a 350-bed hospital in Cedar Rapids, Iowa, achieved a successful physician partnership by adopting an open relationship—with their competition. Rather than trying to prevent community physicians from working for the competition, Mercy works with its competing community hospital to develop tools and partnership programs physicians can use wherever their patients happen to be.
“We don’t want to make it inconvenient for our physicians to practice,” says Jeff Cash, senior vice president and CIO of Mercy. “We realize these physicians aren’t going to align to one hospital. By collaborating with our competition, we lower our costs through technology adoption and make it easier for physicians to do their jobs.”
Cash says sometimes giving physicians what they want adds challenges to his own project goals, but in the end, it’s worth the effort if the additional work builds physician loyalty and improves physicians’ ability to deliver quality medical care.
When Cash came to Mercy four years ago, the first project he launched was a rebuild of the hospital information system.
“The vast majority of physicians didn’t like the system we were using at the time because it didn’t offer enough clinical data and wasn’t user friendly,” he says.
The cumbersome system was so frustrating that when Cash met with physicians, they often spent the majority of the meeting complaining about their data systems. “This commonly overshadowed our opportunity to talk about quality initiatives or how to improve our processes.”
Over a few months, Cash rebuilt the clinical data system, implemented computerized nursing documentation, and updated the hospital’s information management systems. In conjunction with that effort, he selected and implemented a new clinical access portal for physicians. To ensure he was meeting the needs of users, he assembled a core group of physicians, nurses, and medical staff to help him identify the most user- friendly interface features and e-signature options.
The new system is far more user friendly and web-accessible, enabling physicians to access data from any site. The old system was only accessible through the hospital’s remote applications portal. All patient documents are stored in a single system with a logical workflow, rather than in multiple databases depending on where they were treated.
“Most of the doctors started using it right away, and the rest were drawn in by the easy access to clinical results,” Cash says.
Because the physicians have the same physician-friendly system available in both hospitals, they don’t need to choose one or the other to align with, notes Cash. This benefits both hospitals because they are no longer at risk of losing physicians, and they can focus on quality programs rather than complaints about bad technology. “I haven’t had a conversation about how terrible our technology is in a year,” Cash says. “By alleviating their frustration, we were able to move the conversations to talking about quality patient care.”
The Secret’s in the Coding
Providing even more incentive for hospital and physicians to team up is the upcoming release of Medicare’s physician profiles, says Richard Collins, MD, vice president of medical affairs for Jefferson Regional Medical Center in Pittsburgh. The profiles are based on internal data about treatment performance, such as morbidity rates and length of stay. The profile rating will be determined by Medicare’s coding system, which assigns ratings to illnesses based on key words from physician charts. Collins says this shift might be worrisome.
“If physicians don’t comply with coding language requirements, they may be unfairly profiled,” he says. And lack of compliance can translate into financial and professional damage to individuals and the organization.
“Accurate coding translates to hundreds of thousands of dollars in payments per month for us,” he says. To ensure his hospital and physicians are fairly assessed, Collins is ramping up a clinical documentation program, with the help of an outside vendor that partners physicians with trained nurses who understand the intricacy of the Medicare coding system.
The documentation nurses act as liaisons with physicians, reviewing the patient chart concurrently with the delivery of care. They help physicians clarify language that could be ambiguous so that the correct diagnosis and procedure codes can be applied. The nurses are trained to ask the right questions, and to get clarifications around key diagnoses and treatments to ensure they are coded properly.
The challenge, however, is getting physicians to accept the need for additional oversight and frequent questions about their documentation. They can get frustrated if they feel like these additional steps don’t provide an obvious benefit.
But that’s where Collins finds his selling point.
“We tell them that it may not seem of value now, but in two or three years, those profiles are going to be public, and they are going to be based on data being collected now,” he says. “Then we show them how this program is going to make it easier for them to do their rounds by having a specialist oversee their coding.”
According to Collins, there are also significant financial implications. “When documentation accurately supports that patients have more complex conditions, we get higher multiples and are ultimately paid more,” he says.
What’s in it for Me?
The key is open and honest communication. Rather than forcing physicians to participate, hospitals can present partnership options as solutions to problems that affect both parties.
Geisinger’s Howard Grant agrees: “As you think about strategic partnerships, you have to put yourself in physicians’ shoes. Have discussions about the challenges they face, and ask what you can do to help them provide a better quality of care,” he advises. “You may get 100 different answers, but it’s how you provide solutions that makes practicing medicine more tenable for everyone.”