Hospital-Physician Economic Alignment: What it Entails & Why its Important

In the Becker's Hospital Review 5th Annual Meeting in Chicago, Gary Wainer, DO, former CMO of Chicago Health System and current medical director at Winfield, Ill.-based Cadence Medical Partners; Joane Goodroe, RN, independent consultant, Joane Goodroe Healthcare Services; and Gail Peace, president at Ludi; discussed the economic alignment of hospitals and physicians as well as steps needed to create and maintain this alignment.

According to Ms. Goodroe, hospital-physician economic alignment means getting physicians and hospitals concerned about quality, cost and utilization in the same way. There are a number of new hospital-physician alignment models including gainsharing models, bundled payment programs and co-management agreements, but each of these needs effort from both the hospital and physician side to work.

"A lot of hospital executives think 'oh, we have to do this for the physician,' but there is so much opportunity to make this a positive experience for the hospital and physician," she said. Hospitals cannot reign in costs without the help of the physician. For example, better utilization of supplies can help reduce costs significantly, and physicians can help identify new processes to improve utilization.

Hospitals working together with physicians can result better process analysis and cost savings. As an example, Dr. Wainer described the complex case management program that he helped implement at Chicago Health System, an effort that helped reduce costs for high-risk patients by 20 percent. The program involves identifying high-risk patients, who were then given special attention and care, and were also set up with the care they may need post-discharge.

"Physicians aren't trained to think of patients as a population," said Dr. Wainer. "We are just taught to treat one patient at a time, but if hospitals can give physicians the data they need and physicians can learn how to use that data, it can go a long way to reducing cost and improving efficiency." Treating patients as a population is at the core of what drives the new alignment models, he added.

Finally, for these new economic alignment models to reach their maximum potential, they need to be effectively managed. "A hospital's physician agreements have to be vetted every month," said Ms. Peace. "However you outline you arrangements, make sure that you are following through on that." The challenge with the new models is the execution. Complete and accurate documentation and automation tools can help organizations keep up with vetting and maintaining physician contracts.

"Trying to reduce costs while improving care is not possible if hospitals and physicians are not aligned," said Ms. Peace.

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