Beyond Salary: What it Takes for Hospitals to Build a Strong Orthopedic Service Line

While salary and a salary guarantee is an important incentive in recruiting and retaining top surgeon-physicians for any service line or integrated system, long-term success requires hospitals to consider the nuances of the surgical culture and its unique leadership demands and strategies in the planning and implementation phases. When building an orthopedic service line entity, it is critical that hospitals develop a surgeon-centric culture, grant authority to qualified service line leaders and run the service line like a business unit, according to Samuel G. Agnew, MD, president and CMO of Global Trauma Solutions.

After studying failed surgeon-hospital relationships for more than a decade, Dr. Agnew has found that most hospitals and prospective surgeon employees significantly limit discussions centered on the structure and governance of the entity and the inherent benefits to be gained by the orthopedic surgeon and hospital to a few minutes during negotiations and tend to focus on compensation targets or caps. He says the perception in contract negotiations is that "one party just wants to get paid and one party doesn't want to pay too much for obvious business and regulatory reasons," and thus the discussions gravitate towards those issues. "Ninety percent of the rhetoric is about [compensation]," he says.

Dr. Agnew says instead, hospitals need to devote more time to discussing the benefits of hospital employment with potential orthopedic surgeon employees. "The employment strategy has to be around what [the hospital is] going to do for the doctors, their patients and what [it's] going to do to secure their career. The needs of the institution will be fulfilled as the successful partnership takes shape. Volume (the current key hospital metric) should be an outcome of a successful partnership, not a stand-alone strategy [of] which employment is the supporting tactic," he says. "Hospitals certainly have the potential to be a successful partner in one's career; the critical initial step to creating such a sustainable relationship is to be a good fit for the facility. The partnership agreement is the sine qua non for this."

Orthopedic surgeon culture
Hospitals should create a culture that supports and is unique to orthopedic surgeons, according to Dr. Agnew. "Create a surgeon-centric culture that speaks to surgeons' lifestyle and performance needs," he says. He adds that a successful orthopedic service line cannot be run like primary care, obstetrics or any other specialty; it needs an environment that is reflective of orthopedists' specific practices — their time and technological needs and wants. "To create an employed orthopedic surgeon practice for a hospital, one has to have the authority to create not only a new business mentality, but also a performance mentality and cultural change to match the performance needs. That is truly key," Dr. Agnew says. "It [doesn't have to be] a huge upheaval at first, but enough of a change that it speaks to the wants and needs of an orthopedic surgeon."

Creating a supportive environment is important because orthopedists coming from private practice will be entering a completely different culture. "An employed surgeon is going to cross two very disparate [business and performance] cultures: inpatient and outpatient," Dr. Agnew says. "You're bringing together two almost divergent business (costing) models." For example, ambulatory surgery centers typically offer fewer services than the larger hospitals, have a tighter control of costs and invariably include their surgeons as shareholders, he says. One of the most drastic differences between an outpatient and inpatient setting is one's ability to control the environment, according to Dr. Agnew, as multi-service hospitals have a more hierarchical governance structure and a wider variety of patients, and as such have less predictability of governance, service and performance.

The first step in creating an orthopedic surgeon-centric and patient-centric culture is defining the culture of the hospital as a whole. "Have a clear understanding of what the organization is and what it's capable of becoming," he says. Identifying the hospital's culture can help hospital leaders determine the characteristics of an orthopedic surgeon who would integrate well with the culture and then seek out orthopedists with those traits or help develop those traits in orthopedists the hospital currently has on staff.

Service line leadership
Strong service line leaders can be one of the drivers of the service line's success. Often, however, they do not have enough, if any, authority to make changes that could benefit the service as a whole, according to Dr. Agnew. He suggests hospitals give more power to orthopedic service line leaders so they can use their position to make business decisions that can improve the productivity of and revenue from the service. "If you're granted enough authority and information, then you can be effective even in a constrained and local level," he says. Granting orthopedic service line leaders some authority may also prevent any decreases in productivity. "Surgeon output declines rather predictably as the perception of one's autonomy being impugned [increases]," Dr. Agnew says.

In addition, giving an orthopedic service line leader more authority can enable the service line to run more like a business unit with business line profits returned to the entity that created the service line, which Dr. Agnew says is critical to its success. "[The hospitals] that are really successful have put surgeons in positions of leadership and positions where the relationship is really more of a business one," he says. "'Physician-led and professionally managed' mantras need to be amended to 'physician-led and physician-managed.' I see the hierarchy and governance of the service line being altered to the point where if you're the chief of orthopedic surgery at a hospital or practice leader of an employed group, you're really the CEO of the service line. That would afford you a level of accountability and transparency with regard to the enterprise of orthopedics. The enterprise of orthopedics is an extremely powerful entity and can be a vehicle of significant and productive change if executed in proper fashion."

Running the service line like a business requires that hospitals choose service line leaders that have the skills to manage such a business. "Business leadership doesn't appeal to every clinician out there, and being a successful surgeon is not necessarily the only trait to look for," Dr. Agnew says. "You have to have people capable of running a business, people who can take a service line and turn it into a profitable business line."

Related Articles on Hospital Orthopedics:

3 Keys to a Top Hospital Orthopedic Program
Presbyterian Orthopaedic Hospital in North Carolina Plans $84M Replacement Hospital

S.C.'s Providence Hospital Northeast to Stop Delivering Babies, Devote More to Orthopedics

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