3 Insights Into the Future of Hospital-Physician Relationships

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Recently, there has been a lot of activity around physician integration with hospitals. This activity is changing the healthcare industry, and the final outcomes are not entirely certain. According to Michael Colucci, ACSW, MBA, CHBC, CEO and founder of Idilus, a management and consulting company tailored to physician issues, there are additional trends developing in hospital-physician relationships that may change the healthcare landscape. Mr. Colucci has a great deal of experience working with physician groups in mergers and acquisitions. Under his direction, Idilus has formed, financed and developed physician practices as well as negotiated mergers and acquisitions of medical and sub-specialty medical practices.

Here, Mr. Colucci discusses his three insights for future developments in hospital-physician relationships.

1. Physician groups are working together to form independent, private ACOs. Some private groups of physicians have begun working together to develop Medicare-approved ACOs. According to Mr. Colucci, these ACOs are an interesting phenomenon since there is tremendous pressure on physicians to give up on private practice and to become employees of larger organizations and/or hospital-run ACOs, such as ones by bigger hospital systems like Oakbrook, Ill.-based Advocate Health Care, Winter Park, Fla.-based Adventist Health System and Nashville, Tenn.-based Vanguard Health Systems.

"[However,] physicians should not immediately believe there is no opportunity for a group of physicians to remain independent. The major reasons why physicians give up on private practice is because they think they are all alone and cannot do it by themselves," says Mr. Colucci. "There is an opportunity, if physicians are willing to partner with each other in private organizations, for them to be competitive in the 21st century. They do not have to be acquired by a larger, third-party entity."

For example, there is a successful multispecialty group of more than 300 physicians in the Chicago area. "[Dupage Medical Group] is able to provide a high degree of care while, at the same time, having the resources to compete effectively with any major hospital system in the Chicago metropolitan area," says Mr. Colucci.  "At the end of the day, a physician who is employed by Advocate's or Adventist's medical group does not own a piece of that rock. Physicians who are part of Dupage Medical Group own a part of the group. That is more motivating and in the long run, more rewarding."

2. The trend of hospital's acquiring physician groups is cyclical. According to Mr. Colucci, the practice of hospitals' acquiring physician practices occurs in a cyclical fashion. While hospitals are currently acquiring physician practices, evidenced in a shrinking percentage of independently practicing physicians, Mr. Colucci does not believe this trend is static.

"In the 1990s, hospitals were acquiring practices. With the evolution of managed care, hospitals found out they were losing money, so they divested the practices aggressively in the mid-1990s," says Mr. Colucci. "The acquisition of practices is happening again now, but we think there will be a similar turnaround. Within five years you are going to see hospitals again saying they want to divest themselves of medical practices."

3. Organizations may place more emphasis on job satisfaction.
According to Mr. Colucci, it will become increasingly incumbent upon organizations to foster job satisfaction for primary care physicians. This is for a two reasons. First, the demand for primary care physicians is increasing as the baby boomer population ages, but there is a shortage of primary care physicians so the demand for them will be great. Secondly, according to a recent survey by Physicians Practice, many physicians — male and female — are focusing more on lifestyle over pay. Approximately 66 percent of physicians reported they do not have as much time for their personal lives as they think they should, and around 34 percent said they would be willing to make less money if they could reduce their workload.

"Organizations need to think about job satisfaction incentives beyond financial incentives," says Mr. Colucci. "I think that other groups of physicians, whether they are hospital-based or private groups, are going to have to take that into consideration. For instance, Dupage Medical Group has designed job sharing programs, which allow physicians to maintain a private home life, yet at the same time, practice a high degree of professional medicine."

More Articles on Hospital-Physician Relationships:

Survey: Physician-Patient Relationship More Important Than Treatment in Patient Satisfaction
Cigna, Brown & Toland Physicians Announce Accountable Care Initiative
Several West Penn Physicians Dissatisfied With Highmark Split

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