Models of Medical Staff Redesign Page 3
Internal Strategy to Support Programs and Performance
By Andrew L. Epstein, MD
This paper is based upon Dr. Epstein's presentation at the ACHE 2008 Congress on Healthcare Leadership, "Redefining the Healthcare Landscape". See the original slides here.
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Page 3: Contemporary organizational models and their benefits
Around the country, hospitals and health systems are developing other models. Some have been in place a long time; others are new. Here’s a snapshot of the spectrum:
Let’s look at the three of these that lie between the extremes.
I. The structurally parallel Physician Organization model
Why are organizations developing the PO model?
• It allows them to improve quality and benefit from pay-for-performance programs
• It reduces burdensome and complicated regulatory requirements
• It allows them to organize systems and structures to improve quality
• The structure increases accountability via an integrated delivery system
• It rationalizes the investment in sophisticated medical informatics
• It allows the hospital to manage its fee schedule and adjust payments to address areas that are relatively underpaid and/or experiencing physician shortages
Advantages of the PO model
The primary challenges before hospitals are managing costs, paying staff adequately, and both improving and documenting outcomes. A PO structure is an effective way to do this.
A PO:
• Organizes skills specific to physician reimbursement, billing, and compensation.
• Organizes advocacy on physician issues in the hospital and externally
• Enables a focus on physician-led quality improvement.
II. The structurally-integrated clinic model
Why are organizations developing the clinic model?
To address these and other converging issues:
• Physician supply and alignment
• Payment rate increases are lagging behind cost inflation
• Unjustifiable variation and waste of resources
• In consumer environment, poor quality and service levels compared with cost
Advantages of the clinic model
• It increases accountability in the medical group
• It affords deep physician engagement and commitment to improve quality
• It reduces waste, estimated conservatively to be >30% of costs
• It allows the organization to improve service levels
• It extends the organization’s market reach and allows it to grow tertiary and quaternary care
Most importantly, it builds on effective physician leadership and a supportive culture.
III. The functionally-integrated council model
Why are organizations developing clinical management councils?
To engage physicians and enhance functionality. Councils typically:
• Expand the physician perspective in operational improvement and strategy
• Reduce inefficient meetings and wasted time
• Improve communication in both directions
• Reduce workarounds, complexity, and inefficiency
• Diminish the need for back-room deals to increase fairness
To enhance physician leadership and stewardship. This structure:
• Clarifies physician leadership roles and accountability
• Engages and develops the next generation of physician leaders
• Improves the organization’s ability to execute plans and sustain results
Advantages of clinical management councils
Short term benefits:
• Physicians are more engaged and experience increased ownership
• Enhanced patient-centered care, efficiency, and effectiveness
Long term benefits:
• Demonstrated improvement in quality, patient safety, financial performance, education, and research
• Enhanced patient and physician satisfaction and loyalty
• Improved reputation and market position
• Physicians understand the hospital’s competing priorities
The goal for most hospitals today
To meet the challenges of the 21st century, most hospitals will need to redesign the medical staff to operate as an accountable leadership body, enabling effective partnership and achievement of vision and goals. For this to happen, the physicians must be able to organize themselves to operate as a more tightly-coupled system--in a way that gives their leaders the power to make commitments on behalf of “peers” and hold them accountable for fulfilling those commitments. For its part, the hospital must commit to partnering with the physicians in matters of strategy, priorities, resource allocation, and operations improvement.
So whatever structure an organization chooses, facing the future requires three things:
• A hospital that seeks integration from a medical staff able to commit and innovate
• Hospital leadership needs to get very comfortable sharing accountability and authority with physicians
• Physicians need to get very comfortable sharing accountability and authority with each other
And to reiterate the central point:
Our mental model of alignment must be expanded beyond financial relationship models to strategic and operational relationship models.
Without partnership between hospitals and physicians at these levels, neither can succeed.
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