Doctor-hospital affiliations: Trust is key to success

June 1, 2011

It's d?j? vu all over again with physician-hospital affiliations emerging across the country.

The proposed advantages of aligning with a hospital seem to make sense, starting with economic support at a time when some urologists feel like they are treading water just to stay even with practice finances. The fear of how health care reform will play out, the already visible need to invest in more technology, and adjusting to additional regulatory issues continue to threaten the physician's ability to maintain a reasonable profit.

Here's a look at what you can expect in the new world of physician-hospital affiliations.

Economic forces are, indeed, driving the health care industry to develop new models of physician-hospital relationships. Hospitals are touting the ability to offer a new delivery model to the community, the ability to help physicians provide innovative care management and delivery programs, and the ability to measure and report outcomes to the payers, who would then provide financial incentives to better-performing practices. Such a partnership also intends to offer access to data across the continuum of care to help physicians better manage health care for their patients. No wonder many practices are looking at hospitals to see whether partnering is a sound strategy to protect their future.

Hospitals are also in a better position to help practices recruit and incentivize new physicians at a time when there is an obvious shortage that is bound to get worse. Some of these incentives seem all too familiar to seasoned urologists who lived through the last generation of hospital affiliations and managed care organizations that failed to succeed in the long run. They don't want to see history repeat itself at their expense.

Here's the biggest question: Is there enough trust and respect between physicians and hospitals to develop and grow a strong business enterprise that will stand the test of time? No business relationship-and your urology practice is no exception-can succeed and last without trust. It may be the biggest pitfall to affiliating with a hospital, but there are more issues to consider.

Hospital takes over many functions

Managing medical practices is much different than managing a hospital, and you can well expect it will be the practice that makes the biggest adjustment to these differences. The hospital will have the management resources to develop a foundation and determine how the venture will be structured and managed. Generally, the hospital team will develop a set of benchmarks for each practice, based on specialty-specific data, and will require the practice to report to a designated member of the hospital management to ensure there is reasonable oversight.

In their effort to help you succeed, the hospital will probably manage human resources, address performance issues, determine staff salaries, and likely have the last word on hiring and firing. Generally, a budget is established for each practice, and the management team will hold your practice accountable to meet specific revenue targets and contain expenses within the budgetary allowance. The hospital typically takes over purchasing responsibilities for both equipment and supplies. After all, they are much bigger, and with physician alignment they gain significant power to negotiate for lower costs when making purchasing decisions.

Here we are again, back to the importance of trust. Do you trust the hospital and its management resources enough to relinquish decisions that affect the way you work and how your practice functions? Urologists considering hospital alignment need to ask the hard questions before they sign on.

Don't buy the glitz! If you are concerned about the answers you get, don't trust that physicians' interests will be protected, or if you feel that the goals of the physicians and hospital are not aligned, you will be better off taking a pass. Just the same, you can't ignore these emerging trends. If your urology practice stays independent, you will need to take immediate, decisive actions to navigate through necessary change. It will be important to invest in developing and implementing a strategic plan-a written blueprint that can get you moving in the right direction.

Judy Capko is a health care consultant and the author of Take Back Time- Bringing Time Management to Medicine . She can be reached at 805-499-9203 or judy@capko.com
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