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Forging hospital-physician partnerships

By David M. Zimba

As marketplace pressures for lower costs intensify, hospitals and members of the medical community are finding that acceptance of capitation and simple restructuring of provider incentives fail to meet the health care delivery challenge. Without simultaneously assessing, restructuring and strengthening the hospital-medical community partnership, hospitals and physicians are finding capitation, by itself, to be an elusive elixir.

Hospitals and the medical community need to embark upon a voyage of partnership, riding a newly created vessel designed to ensure the enduring coordination of care delivery through an effective alignment of economic incentives.

Defining Effective Collaboration

Effective collaboration is nothing more than a partnership between a hospital and the medical community, not just the hospital and individual physicians, in which partners share in the process of designing and managing an integrated delivery system with:

• Strong professional business management.

• Infrastructure and information systems to support managed care and capitation.

• An aggressive approach to the marketplace.

• An orientation toward optimum care.

• Standards for procedural compliance and for clinical care and outcomes, including education, health promotion and prevention.

• Performance expectations and measures.

• Performance incentives linked to compensation.

Effective collaboration can be maintained only through hospital-medical community partnerships in a given market area. Such partnerships are needed to manage successfully the care delivery process under a managed care regime. Since care delivery ultimately occurs at the clinical level, the vision for such collaboration is for a physician-driven system which provides optimum care to the community served.

At the care delivery level, collaboration refers to care coordination, the fundamental process of achieving and maintaining optimal enrollee health status over a continuum by effectively integrating, monitoring and evaluating direct clinical and supportive health services for the purpose of improving quality and reducing costs.

At the financing and operations level, collaboration refers not just to capitation, which by itself does little to align economic incentives of the partners. Rather, collaboration refers to addressing who, what, when and how care will be delivered, how resources will be allocated and how risk and reward will be shared throughout the medical community.

A successful collaborative partnership requires a give and take by both partners. Both the hospital and the medical community have to offer the other partner a work community embracing attitudes, as demonstrated through collaborative behaviors, which ensure that the partnership rolls smoothly through the changing health care delivery landscape.

What the Hospital Must Offer

A successful collaborative partnership requires that the hospital offer members of the medical community the following:

• Maximum control over clinical decisions.

• Business and management expertise with opportunities for substantial physician input.

• Opportunities to provide input and leadership in strategic planning.

• Deep pockets as needed for information systems and infrastructure.

• Upside potential and downside protection.

What the Medical Community Must Offer

A successful collaborative partnership requires that the medical community accept and embrace a group oriented risk-taking mentality. Members of a medical community should adopt the following behavioral philosophy as part of the collaborative partnership.


• Preemptive.

• More important to do it first.

• “The best way to learn is to make mistakes.”

• “Let’s do it to learn.”

Don’t Think:

• Cautious.

• More important to do it well.

• “We don’t want to make mistakes.”

• “Let’s learn before we do it.”

Ultimately, the success of a collaborative partnership depends upon the restructuring and alignment of priorities and incentives shared by the hospital and members of the medical community. Greater emphasis must be placed on group and system success, greater recognition and rewards must be given for leadership, loyalty, commitment, participation and “citizenship” in the partnership, and greater emphasis must be placed on quality, outcomes, utilization and efficiency.

The practical result of the drive to meet the health care delivery challenge is the need for hospital leaders and members of the medical community to see themselves as a common group with common goals and to plan and act accordingly.

“The point of the game is not how well the individual does but whether the team wins. That is the beautiful heart of the game, the blending of personalities, the mutual sacrifices for group success.” —Bill Bradley, former New York Knick, Rhodes Scholar and U.S. Senator.

David M. Zimba is a manager in the Healthcare Consulting Practice of Arthur Andersen LLP.

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