HealthLeaders Media 2014 Physician Alignment Survey Excerpts

HealthLeaders 2014 Physician Alignment Survey

December 2014

The HealthLeaders Media Intelligence Unit surveyed senior healthcare leaders to assess the strategies and techniques that hospitals, healthcare systems, and physician organizations are using to work toward common objectives and deliver the best possible medical care as it pertains to physician alignment.

This national study, with insights from more than 300 healthcare leaders, displays the overarching need for collaboration among traditional antagonists to achieve their mutual objective of improving the nation’s healthcare system.  

One of the leading findings of the HealthLeaders Media study is that 55% of respondents say they will move toward or emphasize clinical integration with primary care physicians over the next year. This is a significant and ongoing task in aligning healthcare systems across the entire care continuum at the market level. Such alignment/integration objectives and initiatives require a commitment to physician engagement at all levels throughout the organization—from clinical pathways to financial case management. 

The following excerpts reveal how a new focus on physician leadership, care transformation, and efficiency can propel the goal of physician alignment.

Physician Alignment: Modifying Relationships to Meet Value Requirements

More and more, alignment decisions are pivotal strategy decisions. Although many dynamics are at work, the core concept is that emerging changes to the financial underpinnings of the healthcare industry will reward organizations that provide care more efficiently and deliver value.

In addition, previous concepts about physician autonomy are being examined. New approaches to physician alignment must acknowledge the role of physicians as partners in care transition, as supportive participants in efficiency measures, and as leaders in their organizations. 

Challenges in Clinical Coverage

Ensuring sufficient staff, especially in specialties, is a classic business objective and is among the top goals for 50% of survey respondents. The age-old challenge of ensuring coverage in the acute care environment is persistent, while the industry trend of providing more services in outpatient settings has created acute nationwide care shortages, particularly in specialties. 

Contracting with a surgery group may not provide a complete answer, considering specialties and subspecialties. In addition, the competitive landscape has to be taken into account if one approaches the problem of ED coverage by employing specialists. First, one must hire several specialists to provide adequate coverage. Second, there is a good chance that the added employed specialists will compete with existing specialty groups and weaken their finances, which could have undesirable side effects.

Care Redesign Through Physician Alignment

With payers providing a financial incentive based on efficiency, organizations recognize new or enhanced roles for physicians in establishing strategies for care enhancement and in directing modifications to care delivery systems. Both are aided by alignment mechanisms that enhance physician engagement.

Looking at alignment objectives related to patient care and physician engagement, nearly half of the respondents (45%) include the need to engage physicians in care redesign among their top goals. Even higher percentages were recorded by those in health systems (57%) and those from organizations with net patient revenue above $1 billion (62%).

Physician Engagement and Management

Leaders emphasize that communicating to physicians (55%) and seeking physician input on strategic decisions (44%) are actions that are essential to engage physicians in strategic planning.

Although physician engagement is important in all organizations, survey results indicate that large organizations approach engagement differently. For instance, in response to a question that asked respondents to pick only the top two actions that are most important in engaging physicians in strategic planning, a smaller percentage of healthcare leaders from organizations with high net patient revenue (43%) than those from small (62%) or medium (50%) levels of net patient revenue include communicating goals to physicians.

That is not to say that large organizations don’t value communication. Rather, larger organizations may be more inclusive and therefore may depend less on top-down communication. Indeed, more than half of the large organizations (55%) designate physician leaders for participation in strategic planning, such a step is less common at small (43%) and medium (41%) organizations. Indeed, higher percentages of organizations with high net patient revenue (18%) than small or medium (10% each) include leadership and fiscal training for physicians among their top two actions to engage physicians.

Compensation Expectations in Alignment Models

Although 20% of the respondents say that physician engagement is the aspect of managing physicians that presents them the most difficulty, a higher percentage (27%) say that dealing with compensation expectations is their top problem. Because the lever that drives healthcare reform forward ultimately is compensation-based (largely through reimbursements to healthcare organizations and incentives or risk-sharing for physicians), and because the transition from fee-for-service to value-based purchasing has barely begun, we can expect physician compensation to remain a top problem.

As we see variety in alignment models in use, we also see variety in compensation models. Straight production (work RVU) is still in use by 25%, but advisors say this model is in decline. More than half of respondents (58%) use work RVUs plus incentive, especially in organizations with medium (72%) and high (78%) levels of net patient revenue.

Most observers expect that compensation will remain a combination of production plus incentive. As the industry makes the transition to value-based purchasing, the nature of both production and incentive will likely change, though.

Physician Employment and Clinical Integration

Physician employment is the most common alignment mechanism, used by nearly equal percentages of hospitals (82%) and health systems (80%). Although there appears to be parity on employment, we see higher percentages of health systems than hospitals using most of the other alignment mechanisms. For instance, 65% of health systems are involved in patient-centered medical homes, compared to only 44% of hospitals.

Compensation or revenue-related issues top the list of items that respondents say motivate physicians to seek or accept employment. Nearly half (46%) say that the increasing costs of running a practice causes physicians to seek employment. Forty percent say that physicians are motivated by declining reimbursements, while 39% say that physicians seek the security of a stable income, a related idea. 

Clinical integration (55%) and patient-centered medical homes (45%) are selected as a new direction for primary care alignment or to receive additional attention by higher percentages of respondents than other alignment mechanisms. At the same time, organizations expect that contracting with physicians for care services will decline, for both primary care physicians (26% expect to de-emphasize) and specialty care physicians (21% expect to de-emphasize).

The percentages of survey respondents who expect to emphasize employment over the next year with primary care physicians (35%) and specialty physicians (30%) are nearly equal. But 15% say they expect to de-emphasize employment with specialty physicians in the next year, while just 6% expect to de-emphasize employment with primary care physicians.

Delivery of Care and Compensation in Alignment Models

With physician alignment, the relationship between delivery of care and compensation for care seems always on the forefront. The healthcare industry is attempting to increase efficiency and to improve health while reducing the overall cost of care. Alignment methods will be in flux as organizations approach modifications to both care delivery systems and the cost of care. It boils down to needing physician leadership and physician support for care transformation activities, and compensation needs to change to reflect new financial realities. The underlying modification to compensation will be risk-sharing, one way or another.

But survey results indicate that change is coming: Risk-sharing is to get more emphasis, physicians will be called upon to take on leadership roles, clinical integration is receiving broad support as a mechanism that allows both employed and independent physicians to participate in risk-sharing, and the trend toward employment remains a means of ensuring care coverage.