Be careful, the adage says, or you may get what you wish for.
Such is the case with hospital executives who have snapped up physician practices by the hundreds during the past few years. Conventional wisdom had it that by owning doctors, an integrated delivery system would be well-equipped to dominate the primary-care market and shore up referrals. In addition, hospital managers were convinced they could tame the stubborn, independent streaks of cantankerous doctors simply by buying their practices.
Oh, how wrong you can be.
As Mary Chris Jaklevic reported in our June 3 cover story, many of the hospital buyers are struggling with physician productivity problems, higher-than-expected operating costs and mounting financial losses. Some systems have bailed out of the physician ownership business, others remain committed to the concept as a solid, long-term strategy. Most, however, are hoping the assimilation problems are temporary and that the bloodletting soon will stop.
No matter where your organization stands, now is as good a time as any to analyze and refocus your physician strategy. Regardless of whether the decision is to patiently stand pat, sell out or form a joint venture or some other PHO modification, healthcare administrators must remember three things:
Hospitals and medical groups are fundamentally different businesses.
At some point, they must alter their hospital-centered management style.
Physicians must be represented on every decisionmaking committee and briefed on executive decisions.
But in the end, integration can't work unless doctors ease up on the control throttle. Instead of dwelling on who is in charge, the medical group leadership should concentrate on developing useful information systems and standards of care that better align the incentives of both sides of the partnership.