Hospital-Centric Healthcare

Climate Change and Hospital-Controlled Medicine

November 23, 2015

I’m not a climate change denier. After all, it’s cooler out now that it’s fall than it was just a short time ago when it was summer.

Seasons come and seasons go and they do this in healthcare, too, where they are called trends or perhaps lean six sigma.

Thus the rush to alignment which has caused hospitals to bloat in terms of employed physician staff and contracts with national and regional groups, relationships that don’t always work out as they were imagined in the heat of summer. Promises such as, in the case of the former, continued competitive compensation, and in the case of the latter, low or no stipend support and quality coverage from physicians other than gambling drug addicts, don’t always pan out.

As studies such as that from the Kentucky Hospital Association show, hospitals are losing significant amounts of money, running into the many hundreds of thousands of dollars, per employed physician. And, although I can’t find any hard data, I’ve had a number of discussions with hospital administrators and hospital board members about the difference between what’s being promised and what is actually being delivered, what I call the Promise-Delivery Gap™, that is souring them on continuing to contract with large national or regional hospital-based groups.

Yes, this climate change is definitely man made. So, in the spirit of combatting it, what is a hospital CEO or an enterprising physician to do to stop the fall and spring into a better outcome?

Here are some baby steps:

1. Tell the truth about the situation.

Are you better off now or before the alignment?

If your medical group sold to the hospital a few years ago, has your compensation kept pace with the true market, and is it really easier practicing as a hospital employee or as a part of a hospital-controlled group? Or, did you fall for the line “you practice medicine, we’ll take care of the rest?”

If you’re the hospital CEO, or maybe the new one because your predecessor was fired, is that mega size hospital-based group or, even better, that “contract management company” saving you a million in stipends but costing you ten times that in lost revenue?

Either way, don’t let confirmation bias and other all-too-human failings hold you back from telling the truth. The first thing to do to get out of the hole you’re in, is to stop digging.

2. All politics is local.

The way out doesn’t lie with joining another group or sending that hospital contract out for another RFP. That’s true whether you’re a physician employee seeking to break free from declining employment or a hospital CEO seeking to terminate a contract with an underperforming national group.

Instead, the solution is to rekindle an independent, local practice.

3. Heal thyself . . . but not all by yourself.

I know that restarting a local practice sounds difficult, whether your own local practice if you’re a physician or fostering the rebirth of an independent local group if you’re a hospital exec. That’s because it is difficult. But so are continuing unhappiness, lost income, termination, and perhaps even bankruptcy.

You have to have the guts to take the first step yourself, but you don’t have to go it alone. We’ve helped hundreds of physicians form new groups. It takes time, effort, and investment. But it’s the only viable solution.

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