Aligning Physicians: Key Financial Strategies at Innovative Health Systems

From 2000 to 2010, there has been a 32 percent increase in hospital employment of physicians. With such an evident trend amidst the hospital sector, executives and physicians have been collaborating and sharing ideas on the best way to align their strategic and financial goals.

Paula Lovell, president of Lovell Communications, moderated a panel session at the Becker's Hospital Review 4th Annual Meeting in Chicago on May 9 with three healthcare executives: Gary Weiss, CFO of NorthShore University HealthSystem in Evanston, Ill., Chuck Stokes, COO of Memorial Hermann Health System in Houston and James Caillouette, MD, surgeon-in-chief at Hoag Orthopedic Institute in Irvine, Calif. They discussed how their organizations are integrating with physicians today and what financial impacts those strategies are having.

Mr. Weiss said NorthShore, which has four hospitals and a large medical group, has been proactive in recruiting and aligning with physicians. Since 2010, the health system has added 115 physicians, and information technology has been one of the most important reasons NorthShore has successfully aligned with its medical groups. "It's the power of information," Mr. Weiss said. "Having the information we have, we've been able to get a lot of support from physicians. A decade of utilizing our electronic health record is really working for us now."

Similarly, Mr. Stokes and Memorial Hermann have focused on technology and "clinically integrated" goals to align physicians. Memorial Hermann has 5,700 physicians across its 12 hospitals; however, most are in an independent physician association and not directly employed. "It's just kind of that Texas mentality," Mr. Stokes said. "We're independent, and if we don't like something, we'll just secede from the union."

However, he says Memorial Hermann has worked with their physicians to drive down costs within the system by using a physician-led, pluralistic model. Within Memorial Hermann's neuroscience unit, 18 neurosurgeons were tasked with finding ways to reduce spinal implants. They worked together and whittled down seven spinal implant vendors to two, saving the system $4.9 million in one year alone. "It works when you put [physicians] in charge," Mr. Stokes said.

At Hoag Orthopedic Institute, an orthopedic specialty hospital, Dr. Caillouette said physicians and executives wanted to focus on a true joint venture. Physicians and Hoag share governance and equity, a strategy Dr. Caillouette said "creates alignment and prevents friction" that is commonly associated between hospitals and physicians. "Your world is changing," he said to hospital executives. "And you need physicians to be part of the equation if you're going to succeed."

More Articles on the Becker's Hospital Review 4th Annual Meeting:

Employing Physicians: Challenges and Tips
5 Best Principles for Physician Engagement at Hospitals
6 Factors of Physician Engagement in Patient Experience

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