Does the Hospital Culture Consume the Strategy of Successful Physician Employment?

The best environment for successful employment of physicians will have the following characteristics:

• senior leadership supports and stands guard to the success of employing physicians;

• the organization recognizes that a service line of employing physicians is different than other traditional acute care service lines; and

• the employed physician network needs certain organizational elements to be in place to be successful.

Senior leadership support
There is a traditional dynamic tension between physicians and hospitals. For some organizations this dynamic tension can be a negative force for physician employment. If the senior leadership team appears to be fractured over the issue of employing physicians, this will permeate downward into the organization. A common expression that has been heard in the acute care culture is "now that we employ the physicians, they are like any other employee and should be treated in that manner." The reality is that a physician whether employed or not is not like any other employee. Physicians are the main driver of resource utilization and a revenue generator for the economic viability of the hospital/health system. Therefore, the CEO and leadership team need to be in unison regarding the support for this strategic initiative. If this is the case, the remainder of the organization will follow, particularly if held accountable for work related to organizational outcomes.

"Skunk works" environment
The term "skunk works" is a registered trademark of the Lockheed Martin Corp. It is defined as follows: "Skunk works is a term used in engineering and technical fields to describe a group within an organization that is given a high degree of autonomy and is unhampered by bureaucracy yet tasked with working on advanced projects."

In the hospital/health system culture, a skunk works environment is needed for the development of an employed physician group. The management of a physician network is different than other service lines within the acute care delivery system. Just like any other organization that house "skunk works," this is not an environment to do what you want. It is an environment that needs to be held accountable for outcomes. In this case, the successful creation of an employed physician medical group.

Necessary benchmarks for the successful employment of physicians
The necessary benchmarks for a successful employed physician network include the following measures:

• a well-designed and board-approved strategic plan for physician employment;

• senior leadership team that supports the strategy;

• strategic outcomes established and stated by the CEO;

• placement and support for a management team that knows how to effectively manage physicians and their practices;

• physician-lead governance structure to help forge the development of the employed physician medical group;

• clearly defined authority guidelines of decision making;

• performance measures for physicians that have been established through an agreed upon compact and code of conduct;

• robust physician recruiting process which includes standardized employment agreements;

• standardized physician compensation methodology;

• thorough examination of accreditation requirements (Joint Commission- or Accreditation Association for Ambulatory Health Care-centric); and

• robust financial tools to knowledgeably guide management decisions

  • Toolkit should include:

    • financial reports;

    • revenue cycle performance measures;

    • coding review; and

    • fee analysis.

Cultural squeeze
The acute care culture is an overwhelming power in hospitals and health systems. There are many similarities of culture from organization to organization. The reality for all organizations is that the culture tends to be all-consuming. This does afford significant barriers to the introduction of a different culture like the employment of physicians. Given this issue, leadership needs to be attentive to the right organizational structure and infrastructural support for the correct development of an employed physician network. Without a clear vision of the organization’s end goal of physician employment, the culture can and will consume the strategy.

Mr. Hamilton (jhamiltonamm@aol.com) is principal executive with Somerset Health Care, which provides extensive services in the employment of physicians by hospitals and health systems as well as successful venturing physician alignment strategies. Somerset Health Care has developed financial tools to benchmark the economic performance of employed physician networks as well as physicians in the private practice setting. These tools include financial reporting, coding analysis, revenue cycle performance and fee schedule analytics. Mr. Hamilton has worked in senior leadership roles for single and multi-specialty groups, large integrated health systems and single- and multi-hospital community/religious-based systems. Learn more about Somerset Health Care at http://healthcare.somersetcpas.com/healthcare.htm.

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