The structure of physician alignment arrangements is important, but the real key is to hire or partner with the right physicians in the first place, according to health system executives speaking this morning at a panel at the Healthcare Financial Management Association's Annual National Institute.
“You have to pick the right docs,” said presenter Keith Moore, chief financial officer of Hospital Sisters Health System in Springfield, Ill. “It's all about your selection process.”
John Katsianis, vice president of finance and CFO of Christian Hospital in St. Louis, said hiring or partnering with physicians is just like hiring any employee—hospitals must look for the right fit in terms of character and work ethic. The finances of a practice acquisition are much more apparent; it takes more work to determine whether the fit is good, Katsianis said.
Peter Gouws, former vice president of physician practice operations with Loyola University Health System in Maywood, Ill., said hospital executives must plan out to five years with their physician alignment investments. It is critical to get the size and composition of these investments right, especially with outright acquisitions, because it is so hard to unwind an acquisition. A hospital is asking for trouble if it acquires a medical group that competes with an independent group that is friendly to the hospital.
Hospital executives must understand that it often takes three to five years to make practice acquisitions profitable, Moore said. Executives must demonstrate to the board that physician practice losses pay off in other ways, such as incremental revenue from patients who otherwise would have been treated at other hospitals.
Moore also said one huge difference between the current wave of physician employment and the one in the 1990s is who is initiating the discussions. “In 1995, they didn't knock on our door. We kicked their door down and offered them the moon,” Moore said, adding later that, now, “The doctors are at our door everyday.”
More Live@HFMA Coverage
