Physician hospital integration is critical to improving populations' health and success in a risk-sharing reimbursement model. Without a tightly aligned base of physicians, the evidence suggests the health systems will become quickly commoditized under a risk-sharing reimbursement model.
To achieve physician-hospital integration in its fullest form, the combined organizations must operate as a single team and work together to accomplish a set of objectives that cannot be effectively achieved individually. Integration means much more than alignment which is often defined as agreement or cooperation among individuals. Integration takes years to achieve, while alignment can be developed or lost rapidly. Yet, full alignment is a requirement for integration. Since alignment can be advanced or retarded, by the actions of the physicians and hospitals, alignment is more tangible and able to be worked upon to move towards integration.
All the types of alignment can be summarized into three major categories: alignment of purpose, economic alignment, and clinical activity alignment.
• Alignment of Purpose: the correlation of vision, values, and priorities
• Economic Alignment: the correlation of financial returns
• Clinical Activity Alignment: the correlation of activity and expectations of quality, service, and volumes
While these three alignment categories are all needed to create the environment for integration, they can be separately worked upon because there is often not strong correlation between the categories. For instance, a physician might be employed by a health system and have strong economic alignment, while not buying into the health system's vision and referring 30% of the patients to providers outside the health system and thereby exhibit low alignment of purpose and clinical activity.
Measuring and Improving Alignment: A Disciplined Approach
There are numerous strategies to improve hospital physician alignment. However, there are few tools to accurately measure physician alignment. Exciting tools exist to measure and track the clinical activity of the individual providers using insurance claims data. Intuition and "gut feel" is used extensively to determine who is aligned on other factors. The result is often an overreliance of volume (particularly inpatient volume) or employment as the evidence of alignment.
Understanding how your health system's physicians are aligned in each area is important to understand and mitigate the risks arising from environment changes. For instance in most fee-for-service (FFS) dominated markets, the need for and importance of the various alignment components is heavily weighted toward the alignment of clinical activity. In a FFS reimbursement model, volume is what matters. In this case the organization might weight the composite alignment score as:
• 10% Purpose Alignment
• 10% Economic Alignment
• 80% Clinical Activity Alignment
However, in a heavily capitated market or with an organization that wants to move aggressively into population health, the organization might seek a more balanced alignment strategy allowing for full integration to take place. In this case, near equal weighting of purpose, economic, and clinical alignment would be targeted:
• 33% Purpose Alignment
• 33% Economic Alignment
• 33% Clinical Activity Alignment
The result of more fully measuring and understanding alignment creates the strategic insights needed to accurately manage relationships and risk. Being able to look at different groupings of physicians, employed versus contracted economic models, and different specialties, allows the health system to project which physicians might be at greater risk of loss to competitor health systems and thereby mitigate those risks.
Conclusion
The only viable path to achieve the health system's success in the future environment is to work in a unified whole with health care providers whose personal actions and activities are aligned with the health system's efforts (alignment of clinical activity), whose values and aspirations are consistent with the health system's mission, vision, and values (alignment of purpose), and whose finances are linked with the health system's long-term success (economic alignment). Unless the health systems knows how well its physician partners are aligned, it cannot effectively work on the most needed areas for its market and organizational vis] Peterson, L. and Lovrien, K. “Shifting the Health System's Value Equation From Provision of Assets to Capabilities.” Becker’s Hospital Review. Online version, dated July 17, 2013.
Peterson, L. and Lovrien, K. “Shifting the Health System's Value Equation From Provision of Assets to Capabilities.” Becker’s Hospital Review. Online version, dated July 17, 2013.
Peterson, L. and Lovrien, K. “Physician Alignment or Physician Integration?” Becker’s Hospital Review. Online version, dated August 27, 2010. Alignment and integration are related but different concepts. Alignment is: the agreement or cooperation among individuals with a common cause or view. Whereas integration is: the operating as a functioning whole; work together to accomplish a set of objectives that cannot be effectively achieved individually.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.