Do’s and Don’ts in Physician–Hospital Alignment, Part 3

The alignment of physicians with hospitals and health systems can be challenging in today’s healthcare climate, yet interest in alignment continues to expand. In some instances, the necessity of maintaining a strong and diverse medical staff coupled with the threat of losing critical team members and the subsequent closure of a business line may result in hospitals and health systems making decisions and promises they may not otherwise make.

Considering these concerns, this series of articles on physician­–hospital alignments has explored topics relevant to those who are considering a relationship between practices and hospital systems. The first 2 articles in this series discussed pretransactional due diligence, structural design processes, governance, and compensation plans. In this third and final installment, ongoing and posttransactional relationships are explored; accountability, transparency, partnerships, and the use of information technology are discussed in detail.

Ongoing Relationships
Once an alignment transaction takes place, the involved parties have to continue to work together. Sometimes, with the challenges of trying to put a deal together, efforts to provide a fully transparent and accountable posttransaction structure can be overlooked. In order for any such affiliation structure to stand the test of time, there must be a very clear and open process in place for sharing information, data, and overall performance.

Accountability is an impor­tant facet of any posttransaction relationship; both parties must be accountable to each other. For example, the employed physician must be accountable to his employer. This means everything from normal work performance to equipping oneself to meet the day-to-day responsibilities of the position. However, accountability also applies to the employer. In this case, the employer is often the hospital, and the hospital should realize and buy into the concept that they must fulfill the things they committed to during the prealignment discussions. Anything less should result in some form of reconciliation between both parties.

Transparency is also of great importance. Most employees (or physicians who are not fully aligned but significantly tied to a health system) seek some form of transparency. This may manifest as sharing of information and data (including performance) as well as openness in decision-making, not unlike the governance and leadership discussion considered in Part 2 of this series. Thus, an attitude of sharing appropriate information and data is key to building a long-term and sustaining relationship.

Partnering actions are also an important part of the behavior of both parties posttransaction. So much work, effort, and emphasis are placed on getting the deal done that this issue often is overlooked. Consequently, people start to take others for granted, which inevitably compromises trust, transparency, and accountability. Although true partnering initiatives may not be the legal structure in each arrangement, an attitude of partnering is extremely important for the long-term sustainability of the alignment transaction.

Another key to success in the ongoing relationship posttransaction is the level and degree of information technology (IT) use. This is related to transparency, but is really much greater than just sharing information. IT in the current healthcare environment is an absolute essential. It is imperative to be able to pull together data from a clinical standpoint that can be shared over a large number of participating providers. Such forms of clinical integration are critical to the long-term success of both the hospital and the physician going forward. Education is important in this process; that is, teaching and acquainting the physicians with some level of thoroughness relative to what IT is capable of doing as well as the nuances of how best to get information into the system. When physicians are under great stress to be productive (which can largely be tied to their compensation), the aggravation of working with an IT system that is only partly functional does not create a long-term trusting relationship or success in the alignment strategy.

Building trust and respect, therefore, is a great way to summarize these matters. Understanding roles, keeping accountability well defined, and sharing information through a transparent mechanism is a sound formula for success as it relates to these alignment structures.

Planning for the Unwind Possibilities
Although no one likes to talk about the potential for divorce, particularly prior to the marriage, these possibilities must be addressed and well documented prior to consummation of the alignment structure. There are ways to provide the physicians with a “soft landing” in an unwind that does not hurt the hospital, and, in the long run, could be very helpful. This should be the approach of the parties involved. Moreover, specific unwind protocols and policies should be defined so there are no misunderstandings as to how certain calculations will be completed or other matters resolved relevant to the unwind process. Assuming this has been done, inevitably issues will arise that have not been specifically considered. This calls for cooler heads to prevail, with members of management of both the hospital and the physician group sitting down and doing what is best for the entire process. Often, this means reaching a compromised solution, maybe even one that is not quite as preferable to both compromising parties. Nonetheless, compromises are essential in the spirit of working together, now and in the future, postunwind.

Many do’s and don’ts apply to the entire concept of physician–hospital alignments, with variations from the very form or definition of the alignment model to the details of that model. Alignment requires a great deal of planning, expertise, and, in many instances, an independent party to help mediate the process. If these matters are addressed and appropriate agreements reached and then consistently applied, the chances for a most successful transaction are much enhanced for the hospital, health systems, and the physicians with whom they are aligning.

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