As health care continues its shift from volume to value, physicians need to be more engaged than ever in the performance of hospitals and health systems. Close ties between payment and clinical care are making it critical for physicians to be involved in financial improvement initiatives in healthcare organizations.
Key Strategies to Engage Physicians in Financial Planning and Performance
Physician engagement must start with physician leaders. The following are four critical areas of focus.
Physician leadership development. Physician leaders need to learn key financial and management skills to navigate value-based care today. Acquiring these skills may involve pursuing either a master’s degree program or other formal education in healthcare finance.
Performance improvement. Learning a performance improvement technique such as Lean can help physicians undertake process improvement initiatives in their practices. The ability to drive cultural change, standardize work, reduce variation, and eliminate waste will be essential in cost-reduction efforts.
Creation of senior leadership role. It is critical for physician leaders to play a key role in the senior leadership within a hospital or health system, such as a chief medical officer or chief quality officer. It is equally important that senior leadership also include representation from the elected medical staff leadership.
Empowerment. The elected medical staff leadership also should represented at key meetings throughout the organization, including monthly operations meetings, annual budget meetings, and capital planning meetings. Other physician leaders, such as medical directors, should be represented at critical service-line meetings for the service areas in which they work.
Complexity of Financial Payment and the Revenue Cycle
With the advent of Medicare’s value-based payment, a new layer of complexity involving quality, safety, and performance improvement was added to the hospital revenue cycle. Readmissions, high rates of complications, and mortality now have immediate impact on a hospital’s bottom line.
Engaging physicians via physician leaders quickly is essential to finding opportunities for improvement. In some cases, the organization may need additional resources to advance efforts to reduce readmissions.
Bundled payments present another opportunity to engage physicians, using the service-line teams already in place. These teams can focus on cardiac or hip replacement bundles that can yield ways to improve quality and safety and reduce cost. Addressing supply chain opportunities throughout the organization can be beneficial and will require physician input to be successful not just for bundled payments but also in other areas of clinical care.
For hospitals to be financially successful today, they must undertake appropriate efforts to develop, train, empower, and promote transparency for leaders throughout their organizations. These elements will be critical with physician and physician leadership, given the impact physicians already have on healthcare finance.
Byron C. Scott, MD, MBA, is deputy chief health officer at Simpler Consulting, which is part of IBM Watson Health, Chicago.