From Conflict to Opportunity Creating Competitive Advantage in Hospital/Physician Relations

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From Conflict to OpportunityCreating Competitive
Advantage in Hospital/Physician Relations

• Art Haines, CHE
• Principal
• Integral Strategy Group

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Objectives

• Outline the key forces affecting
  hospital/physician relationships
• Examine the limitations of typical strategies for
  improving relations
• Explore the Integral Approach to building
  hospital/physician partnership
• Understand the application of the Integral
  Approach in a case study

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Physicians Under Pressure

• Increasing pressure on costs
• Increasing demand for production
• Declining compensation
• Lost autonomy
• Cracks in the physician/patient relationship

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Hospital/Physician RelationshipsUnder Stress

• Mistrust, conflict and miscalculation
• Dog-eat-dog competition
• Lost development opportunities
• Reduced economic performance
• Risks to community reputation

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The Battlefield

• Skimming the ancillaries
• Demands to limit call coverage or receive
  pay-for-call
• Ambulatory Surgery Center and Specialty Hospital
  development

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Tired Solutions

• Bare knuckled competition
• Lock them out the market
• Legislate/regulate
• Shift the economics
• Jawboning
• Build allies and alliances
• Joint venture
• Recruit new docs
• Complain and blame

Simple approaches to complex situations are not
effective or sustainable
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An Integral View of Complexity
SUBJECTIVE
OBJECTIVE

Attitudes Emotions Aspirations
Skills Behavior
INDIVIDUAL

Structure System Process
Culture Values Vision
ORGANIZATIONAL
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A Recipe for Failure
SUBJECTIVE
OBJECTIVE

• Weak leadership and management skills
• Inappropriate behavior

• Fear and anger
• Desire for independence and autonomy
• Win at all costs

INDIVIDUAL

• Culture of disrespect and mistrust
• Guarded communication
• Win/lose, us/them thinking
• Weak community vision

Compete directly Lock them out Legislate/regulate
Change the economics Joint venture
ORGANIZATIONAL
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Sustainable Integral Solution
SUBJECTIVE
OBJECTIVE

• Group process and conflict management capacity
• Leadership, management planning skills
• Constructive, committed behaviors

• High level of commitment
• High integrity
• Personal and community vision

INDIVIDUAL

• Culture of respect, trust, candor
• Integrated community and individual interests
• Win/win/win thinking

• Sound business structures
• Aligned incentives
• Shared economics and business risk
• Supporting policies, procedures

ORGANIZATIONAL
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Resolving a Pay-for-Call Dispute

• Mid-sized community hospital with strong
  performance and CEO
• History of mistrust and miscommunication
• Issue had reached the boiling point
• Pay for emergency call or else
• All sides saw community service at risk

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The Flash Points
SUBJECTIVE
OBJECTIVE

• Physician ultimatums
• Board/CEO stonewalling
• Strong, successful CEO
• CEO guarding the treasury

• Board member desire for community responsibility
• Physician anger, fear over reimbursement,
  autonomy
• Chief of Staff exhausted from call schedule

INDIVIDUAL

• Resentment over hospital profit
• Anger over past wrongs
• Moralistic position taking
• Distance between physicians and Board/CEO.

• Iron clad staff bylaws
• EMTALA requirements
• Limited numbers in some specialties
• Few facts known to all
• No structure for addressing the problem

ORGANIZATIONAL
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Integral Approach to Pay-for-Call Breakdown

• Starting with the Integral View,
• Create common ground
• Envision success and design a process for
  achieving it
• Address critical personal, business and clinical
  issues
• Design for sustainability

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Step 1Creating Common Ground

• Performed integral assessment of situation
• Team-formation retreats
• Reported findings
• Established overarching goal
• Provided competency-building education and
  coaching
• Created core working group to craft a solution

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Aligning Competing Values
Do what is right, Follow the rules.
How can I excel,win the game?
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Step 2Envisioning and Design

• Created group ground rules and behaviors
• Defused anger about past wrongs
• Created shared commitments around the current
  situation and the future
• Developed shared principles for a pay-for- call
  solution

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Shared Principles

• The responsibility for emergency medical care is
  shared between the hospital and the physicians
• There is an interdependent relationship between
  the hospital and the physicians.
• The hospital acknowledges there is a reasonable
  monetary value for a physician being on call and
  providing medical care.
• Physicians are valued partners in helping the
  hospital make strategic decisions.

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Step 3Address Critical Issues

• Pay for Call Program tied to regional market
  practices
• Hospital sponsored locum tenans physicians to
  supplement call schedule
• Physician recruitment package implemented
• Hospital sponsored protocols and financial
  support for OB coverage of FP deliveries
• Physician commitment to cost management efforts
• Physician/Hospital task force to administer
  programs

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Step 4Design for Sustainability

• Task force to continue to develop and fine-tune
  program
• Developed new Board level committee to identify
  and resolve hospital/physician issues
• Established informal CEO/physician meetings
• Regular information exchange
• Sound legal and financial counsel

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An Integral Solution
SUBJECTIVE
OBJECTIVE

• Physician leaders promote plan
• CEO shares financial info and speaks personally
• Hospital sponsored leadership development courses
• New skills in communications, negotiations,
  conflict mgmt

• Leaders empathy for each others situation
• Emotional connections to past wrongs defused
• New willingness to lead from commitment

INDIVIDUAL

• New level of respect, trust, candor
• Open communications
• Win/win/win thinking
• Physician commitment to cost containment

• Market based system
• Admin/physician task force
• Board/admin/physician oversight committee
• Hospital support for recruitment
• Cost containment program
• Annual leadership retreats

ORGANIZATIONAL
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Results One Year Later

• Pay-for-call system successfully implemented and
  on budget
• Length of stay and cost reductions
• New physician recruitment
• Formal and informal structures evolving
• CEO and physicians acting as strategic partners
• Docs working for financial/operational
  improvements

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Six Keys To Success

1. CEO/Physician leaders/Board committed to new
   partnership
2. First opportunities, then relationships
3. Align the dominant values
4. Structure for accountability
5. External support for learning
6. Adaptive, sustainable solutions

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Background
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JAMA January 2003

• Physician satisfaction levels declined
  marginally between 1997 and 2001.
• Satisfaction related to
• Threats to autonomy.
• Ability to manage day to day patient interactions
  and their time.
• Ability to provide high quality care.
• Source Changes in Career Satisfaction Among
  Primary Care and Specialist Physicians,
  1997-2001, JAMA, January 22/29, pp 442-449.

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MGMA September, 2003

• New Survey Reports Physician Compensation Flat,
  Production Up
•  
• Many physicians saw slight, if any, increases in
  compensation during 2002. The Medical Group
  Management Association (MGMA) "Physician
  Compensation and Production Survey 2003 Report
  Based on 2002 Data" indicates that primary care
  physicians' median incomes rose by less than 3
  percent between 2001 and 2002. Some specialists
  saw increases that averaged 4.3 percent over that
  period, while others had their salaries decline.
  At the same time, many groups reported larger
  rises in their medical production and charges.
• Higher costs for labor, supplies and professional
  liability insurance, combined with cuts in
  commercial and government reimbursement, made it
  difficult for many physicians to maintain net
  income,

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Clinical Advisory Board

• Physician reimbursement in decline.
• Physician practice costs on the rise.
• Malpractice premium crisis.
• Resurgence of health care inflation, cost
  management.
• Cracks in the physician/patient relationship.
• Impending specialty shortage.
• Source Clinical Advisory Board, Recovering
  Physician Loyalty, 2002