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What do Hospital-Physician Relationships Need to Succeed?

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Hospital-physician relationships have gone through many evolutions since the inception of the modern-day hospital and, more important, the evolution of the third-party payment models used in the United States. We have nonprofit hospitals, physician-owned hospitals, for-profit hospitals, rehabilitation hospitals, private practice physicians, large group practice physicians, foundation model practices, employed physicians, staff model physicians and virtually any and every other new model that can be developed and legally put into operation.

The basic premise of all these models and delivery systems is to provide the best possible care for the patient. The reality of the situation is that hospitals, physicians, consultants, attorneys and accountants all realize that, if a physician is in financial distress in his or her practice model, he or she typically turns to the hospital for assistance.

Conversely, if the hospital needs an increase in volume to maintain its financial situation, the hospital looks to recruit physicians. The message is that, once you strip away the layers of the “creative” models that are available to all parties, you find that, for the patient’s best interest, a symbiotic relationship between hospitals and physicians must exist.

Dissecting the hospital-physician relationship

A comprehensive description of many of the models of hospital-physician relationships available today is beyond the scope of this article. Nonetheless, all relationships — whether monetary or referral — are governed by detailed and strict federal regulations. And no relationship should be entered into without consulting a health care attorney. Regardless of the model that hospitals and physicians choose to be engaged in, many do not work to the satisfaction of both parties.

The simplest relationship is one in which a physician obtains privileges at a hospital and admits and refers to that hospital in return for the capacity to provide high-quality care to his or her patients. In turn, the hospital must ensure that:

  • Appointment wait times are short,
  • Paperwork is minimal,
  • Service is of the highest quality, and
  • Communication with the referring physician is good.

Unfortunately, this does not always happen. So physicians send their patients to other hospitals, open their own diagnostic centers or take other courses of action. And when doctors do so, hospitals engage in strategies of their own to increase or keep market share. Many times these strategies lead to competition with their own loyal physicians using revenue generated by physician referrals for which they are now in competition. This leads to an uncomfortable position for both the hospital and the physicians.

Of course, hospitals aren’t the only ones at fault when a physician relationship fails. Physicians often overpromise when they enter into a hospital relationship. Many times physicians promise a time commitment for activities such as committees and department chairmanships that they cannot deliver in their busy professional lives. Hospitals build plans around the physicians’ commitments and get frustrated when a physician fails to come through.

Working for the patient as a team

Hospital-physician partnerships can work and work very well if both parties keep the reason for their relationship — that is, the patient — in the forefront of everything they do. The current economic model of our health care system is very complicated, but it’s still based on all parties being efficient on the patients’ behalf.

Physicians must always realize that any relationship with a hospital must achieve the goals set by both parties. If benefits accrue to only one party, such as the physician, the relationship will be short-lived. Hospitals exist not for the economic benefit of physicians; they exist to serve patients. (Physicians should read the mission of the hospital that they work with to gain an understanding of why the hospital was founded.)

On the other hand, the hospital must also have realistic expectations of the relationship. The hospital needs to provide a physician with an efficient place to work and send his or her patients. Hospitals must also realize that every action in pursuit of market share and mission fulfillment has an economic impact on its physicians.

For example, if a hospital recruits new orthopedic surgeons to use the hospital operating rooms, these new doctors will affect the existing orthopedic surgeons’ operating room times. They will also affect the diagnostic services and physical therapy provided in the hospital. All of these increased services are great for the hospital, but they may not be so great for many of the health care professionals who work at the hospital.

Achieving multiple goals

Ultimately, a successful hospital-physician relationship must be more than economic in nature. It must have measurable expectations that are shared by the hospital and the physician. It must improve the quality and efficiency of patient care. And, finally, it must involve the kind of communication that occurred in the old days — when there was time in the health care system for talking.

Are you ready to start a conversation?

Tagged with: Healthcare Consulting