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Physician Integration – Still a Key Ingredient to a Successful Healthcare Organization

December 14, 2021

During the pandemic, many people improved their cooking skills and began a new hobby of baking bread. The secret to baking bread is to have all the necessary ingredients to make the bread rise and bake perfectly. In a similar way, physician integration is a “key ingredient” to achieving a fully integrated healthcare organization.

In the past, hospitals and healthcare organizations just accumulated private practices with little integration or standardization. The common phrase was “just come and practice here just like you were in your private practice.” We all know that has not worked and has led to unhappy physicians and CEOs.

So, what does physician integration actually mean? First, let’s discuss the type of arrangements that physicians have with a hospital or healthcare organization:

  1. Affiliate Physicians – The physician is in private practice and is a member of the medical staff of a hospital or healthcare organization.
  2. Professional Services Agreement (PSA) – The physician provides contracted services to the hospital or healthcare organization.
  3. Employed – The physician has an employment agreement with the hospital or healthcare organization.

All three of these physician relationships/arrangements are vital to a successful healthcare organization because they bring various ingredients to the organization.

Most affiliate providers are loyal to the healthcare organization, and, in many cases, hold key directorships. The PSA physicians, in many cases, are anesthesiology, radiology, emergency medicine, or hospitalist groups providing services. They too, in most cases, have a seat at the leadership table in some capacity.

The third group is where I see the opportunity for hospitals and healthcare organizations to engage employed physicians in leadership roles. Too many times health systems overlook this until there are financial issues or coverage issues that cause the system to put them into a leadership role instead of having these physicians in key leadership roles from the start.

Health systems should integrate all three groups of physicians into key leadership roles, and these roles should include the following:

  • Governance – This includes not just how the medical group runs but also the organization’s leadership and governing board.
  • Strategic service lines – This can be based on the specialty offered for that service line.
  • Management leadership – This should be at all levels of the organization.
  • Joint venture with hospital/healthcare organization – New Stark Law rules make this easier to do.
  • Clinically Integrated Networks (CIN) – Physicians at all affiliation levels should be heavily involved in the development and operations of the CIN.
  • Committees – These can range from the discharge planning process to EMR implementation.

This sounds simple, but it’s not. You have to navigate politics, egos, money, and fear of losing control – and that goes for both the physicians and the organization’s leadership.

So, how do you achieve physician integration? Start with physician compacts, medical groups that are not separate from the hospital but seen as ambulatory clinics of the system. Secondly, use frequent, clear, and transparent communication. That is the foundation of starting to build your integrated organization. It’s not easy, but it’s critical to achieve high patient, physician, and staff satisfaction.

Jimmy Burnett Managing Director, Healthcare Operations Performance Alignment

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