In markets where physicians hold ownership stakes or financial interests in one hospital, and where there is evidence that those same physicians are discharging patients from a competing hospital’s emergency department over to their own outpatient facility to be possibly treated in their own hospital, look for new battle lines to be drawn.
For hundreds of community not-for-profit hospitals throughout the nation, physicians are still seen as the customer since they are the only ones who can admit a patient to a hospital. However, today, it is not uncommon for those physicians to be a customer at 9 AM and by 2 PM to be a competitor, working in facilities in which they have an ownership interest or where they are rewarded for their contributions. This anomaly too, is one of the many things that is changing in healthcare.
There are few remaining days left where there will be friendly competition between hospitals for the loyalties of independent physicians. Many not-for-profits, which for years have allowed entrepreneurial doctors to cherry-pick patients for admission—allowing those physicians to have their cake and eat it too—are taking a much tougher stand. They will have no other choice if they hope to survive.
This shift to a more no-nonsense market strategy is what happens in medicine when it becomes all about the money. Doctors are being forced to choose sides. In defense of doctors, the drive to owning, or having an equity interest in a hospital or some outpatient service, is an attempt to protect real and perceived threats to their incomes.
Community not-for-profit hospitals are employing physicians at an increasing pace. Eventually, to make these employed physician practice investments work monetarily, they will have to move to the integrated health system/closed medical staff model as a means of survival.
With a strategy that has its fair share of risks and requires skillful implementation, there is a cautionary note:
You cannot acquire physician practices and maintain a business-as-usual management model. A collaborative, shared governance structure is essential. This means recruiting or developing physician executives to share in the leadership responsibilities. Having a Chief Medical Officer is not the end game but just the first step.
This transformation will keep the recruiters and organizational development consultants very busy and dramatically change medical development and physician recruiting.
© 2012 John Gregory Self
© 2020 John Gregory Self