Aligning Employed and Independent Physicians: Steps and Tips for Success

Hospital-physician alignment has become a bigger concern for hospitals and health systems as they look to provide higher quality care and start managing patient populations. Sharing clinical data can prove challenging if hospital-employed physicians have trouble getting information from independent physicians and vice-versa.

"If there isn't good data flowing between independent physicians and hospital-employed physicians, [it can] lead to less efficient, higher cost care," explains Idette Elizondo, manager at DGA Partners. Aligning an independent physician group with a hospital-employed physician group can help make transitions of care smoother and ultimately make the patient care experience more seamless.

There are various alignment options, ranging from practice leases to clinical data sharing to full clinical integration, that can help remedy this problem. Ms. Elizondo and Matt Tam, senior associate with DGA Partners, have experience facilitating this type of alignment and recently did so with a three-hospital system in a mid-Atlantic market. Here, they share how they found the right alignment model in that situation and some general tips for other hospitals or health systems seeking similar alignment strategies.

Getting started

Finding the right form of alignment can be challenging, as the physician groups may have different needs or goals for the alignment. To help the process along, each physician group should form a steering committee. "That was integral to having a successful discussion," says Mr. Tam. "Without that, [alignment] wouldn't have been possible."

Once steering committees have been formed, Mr. Tam and Ms. Elizondo recommend the following three steps to help determine the best alignment option that works for both groups.

Interview. Here, each group or steering committee separately determines what is important to them to get out of a possible relationship. "It should be a forum [where everyone is] comfortable sharing thoughts confidentially," says Mr. Tam.

During the interview, each group should determine what they are trying to achieve individually from alignment. It's also important for them to share their views on the rewards of working together, including how alignment could help with payor relations in the future.

It is also critical to determine what the deal-breakers are for each group, in order to mitigate those during future discussion.

Evaluation. During the evaluation, Mr. Tam and Ms. Elizondo say to use the information gained from each group during their interviews to sift through alignment options and decide which of the two or three options would be best-received by each group.

Financial model. Even though this step comes last, it is crucial to the process. "Without a financial model, you would be able to work on [alignment], but not in the long term," Mr. Tam explains.

In this step, the groups should assess the possible impact of alignment on current utilization. They should consider which payors might be interested in partnering with providers to manage cost and quality. Also, they should estimate how the patient population would shift or grow if payor partnerships changed as a result of alignment.

Finally, they recommend estimating what care cost savings can be achieved through alignment and measure that against the required care management and information technology investments. The model does not have to be complicated, but it does need to be tangible.

If the chosen alignment relationship is shown to be financially beneficial for both groups and also doesn't cross either of the groups' deal breakers, the relationship will most likely be beneficial and sustainable.

General tips

Aligning an employed physician group with independent physicians isn't always an easy task. The following five tips can help simplify the process and ensure both parties get the most out of a possible relationship.

1. Emphasize that alignment doesn’t mean loss of identity. Alignment does not always mean one physician group has to give up their electronic medical record system or their practice style. "You can work on care quality and costs and some back-end solutions of sharing information," says Ms. Elizondo. "It doesn't have to mean a lost identity." This is especially important if the independent group does not wish to become employed by the hospital or be required to use the same data system — it is not a necessary part of alignment.

2. Focus on commonalities. While some differences may arise throughout the alignment process, those differences should be discussed but should not become the main focus of discussion. "We think it's important to focus on common goals and interests," says Ms. Elizondo. After all, both groups stand to gain positive benefits from an alignment relationship.

3. Put data first. Clinical partnerships need data to improve the flow of clinical information between and among physicians and to monitor clinical outcomes to determine incentives and plan for more improvement initiatives. To start, the groups can use paper-based solutions, payor claims data and registries and then move to higher-cost electronic medical records later after the relationship is more established.

4. Assess individual financial opportunities. It can be easy to get caught up in the overarching financial opportunities for each entity that come along with alignment, but it is important to also break down the financial opportunities at the individual physician level. "Physicians want to know, 'what does it mean for me?'" says Ms. Elizondo. She recommends showing all of the physicians how the alignment can reward them, which will help the process go smoothly and help gain physician support.

5. Bring in a legal team early on. Once the groups decide on a preferred alignment option, it is important to bring a legal team on board as early as possible. "Whenever a relationship involves two strong market players or benefits for independent physicians, legal issues arise," says Mr. Tam. In order to finish the deal and have it be successful in the long term, lawyers should be part of the equation.

More Articles on Alignment:

Physician Practice Acquisitions Will Be Critical for Community Hospitals Under Healthcare Reform
4 Post-Reform Challenges to Building a Great Physician Group Practice
Top 10 Physician Complaints of 2012

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