Managing Hospitals by Physicians: Pros and Cons - Essay Example

Topic: Pros and Cons of managing Hospitals by Physicians The intricate nature of the relationship between hospitals and physicians within the health care system has insightful outcomes on the economics as well as management of hospitals. Even though, their prominence is perpetually increasing, physicians usually are not paid work-persons of hospitals. To a certain extent, autonomous physicians have various 'advantages' at a given hospital which allows them to facilitate medical services within the respective facility. Physicians, as a return to these advantages they're bestowed with, are quite expected to provide some services on behalf of the hospital. Moreover, in turn, hospitals are reliant on these physicians as a recommendation foundation for patient volume. This arrangement of the health care system is a very old tradition which has only presently illustrated the signs of transforming with the uprising of hospitalist physicians. It is more referred to as a strange economic relationship for the reason that the physicians seek advantage in financial terms from the use of hospitals but do not put up with the unswerving liability for the economic health of these institutions (Final Report, 2008). 1. Introduction and Background The rock-strewn nuptial between physicians and hospitals is barely a novel occurrence. The stringency between the notion of the hospitals as a 'doctor's work-place', pertinent to medical regulation, and the hospital as an autonomous corporation with its own locus of control and an array of operations has buffed and diminished for a major part of the twentieth century (Stevens, 1989). Commencing with the regulation of workmen's compensation funds by innovating hospital administrators and accusations by physicians that hospitals were bartering their charitable services for a benefit, the thrash about for independence, regulation, respect, authority and money has furthered at a swift pace. Physicians who were trained and preserved as the trend-setters of all medical practice, construed to with the growing portion of the nation's health care dough flowing straight away to the hospitals and not to them. In turn, a novel strain of the non-physician hospital administrators who were trained to regulate their institutions as a business, construed to the physicians as indignant of 'lay' control and the rules as well as regulations essential to regulate a subtle and efficacious venture. With negligible irony, an administrator remarked that 'doctors, for the reason that they are doctors, are hard to accommodate into the hospital organization' (St. Luke's Health Initiatives, 2005). And hence, it has vanished. There have been many periods of cooperation, chiefly, in the face of a professed common rival such as third party payers and tyrannical government control and payment systems, but by and large, the provider community of the hospitals and physicians has maintained itself as a debatable creed for much of the twentieth century. Even though, the routine dealings of physicians and hospitals were apparently cordial in superficial terms, there was frequent smouldering distrust, hostility, antipathy and even detestation between the two communes. The objective of physicians has always been the regulation of the scope of independent, private practice with minimum restraints between themselves and their patients. The philosophies of the hospital medical personnel, the authoritative model of the physician-hospital connection, were based on utmost physician autonomy and negligible intervention from the alleged standardized hospital procedures. The objective of the ever-growing stream-lined corporate hospital, on the other hand, was to accentuate the efficacy of the medical production so as to realize ever greater benefits and profits to the economic bottom line which states that the charity mission of charitable non-profit hospitals and the actual desire to enhance the health results albeit. This association between the physicians and hospitals was more of a necessity where each required the other. However, it was not without competing interests and discord (St. Luke's Health Initiatives, 2005). However, on the other hand, it can also be argued that not all physicians and hospitals, indeed, are the same. The relationship between physicians and hospitals can be quite dissimilar for the physicians employed in large incorporated hospital settings, for some medical specialties that are chiefly found in hospitals for selected mutual hospital-physician medical ventures, as well as for hospitals that industriously cultivate mutually fruitful relationships with physicians. The common tip, nevertheless, is that the tensions that have been prevalent between the physicians and hospitals are confirmed ever since the origination of the industrialization of the health care in the early twentieth century (St. Luke's Health Initiatives, 2005). It is somewhat out of harm's way to predict that they are not going to go away any time soon for the sole reason that like most of the matters of concern that constitute today's chronic catastrophe in health care, the old is new all over again out of the blue. Descriptively, hospital-based physicians are inclusive of specialists such as anaesthesiologists, pathologists, and radiologists each of which is dependent on their position in the hospital so as to obtain recommendations from other physicians who are practicing at their hospital. More to it, hospitals often perform an assortment of services for these physicians and in turn, they are reliant on the hospital-based physicians for the reason that they facilitate with essential services to the hospitals. Some hospitals, however, have reduced payments to the hospital-based physicians, while some are calling for payments from those physicians supposedly in order to pay back to the hospital for the services it provides, or for other associated purposes such as contributions to a capital fund, etc. During the past fifteen years, giant health systems along with community hospitals entered into business relations with the physicians. Many of those 'first generation' arrangements concluded with financial failures for the hospitals, and instead of bringing about better professional relations, resulted in critical wear away of their relationships with both the physicians who were scrutinizing from the secondary perspective. 2. Transformations in the Physician-Hospital Relationships The times of wobbly cooperation, and sometimes competition, between hospitals and their medical personnel in private practice have apparently come to an end. Statistics suggest that only hospitals which are strictly aligned or integrated with a significant creed of physicians will be capable of organizing and managing their delivery configuration so as to meet the consumer demands for price, quality, efficacy, and community fulfilments. Hospitals which lack a strong association with a group of aligned doctors cannot be expected to survive on their own. Today, the conventional relationships and anatomies that connect hospitals and physicians have transformed to a large extent, from movably coupled to rigidly coupled arrangements. Organized delivery systems are on a strict requirement for physicians, whether they are employed, contracted, or autonomous, who are associated with the system's hospitals and other physicians. Employment of physicians by the hospitals or a hospital-belonging medical group may facilitate, but not guarantee unification, nor is employment considered as the only way to unite with physicians. However, joint ventures, professional services, agreements or contracts, physician-hospital institutions facilitate with the ability to unite with physicians to anecdotal degrees (Bader et al, 2008). It can, hence, be quoted that behaviour, and not the structure, describes an efficient relationship between a physician or a physician group and a hospital. It is essential for physicians or other clinicians along with managers to pledge to and practice in accordance with the common values such as respect, trust, and commitment to excellence. Moreover, physicians and the hospital or system ought to share a mutual vision that they have developed collaboratively. Physicians are expected to actively get involved in leadership roles in institutional-wide strategic planning and in planning or managing hospital product and service lines. Physicians ought to actively contribute to the programs in order to increase hospital efficacy, inclusive of occasional turn-around of test results and functioning rooms for physicians, and lessened lengths of stay and resource use. Such efforts collaboratively include an efficacious hospitalist regime. Physician reward is based on their productivity, contribution in the organizational leadership, and attainment of shared hospital and physician financial and quality targets. Physicians, in their most efficacious role, are capable of recruiting new employees without taking financial stakes. The hospital can lawfully apply programs which are capable of helping physicians attain financial security, thereby, rewarding them for paramount productivity and quality, and help them with a livelihood that is more predictable and equalized professional as well as personal life. Physicians also keep patient recommendations within the system as much as it is possible. Physicians along with the hospital can bid for and efficaciously manage bundled payments, and they contribute collaboratively in the arrangements that are based on the pay-for-performance trend. It is also noted that the formal medical staff leadership structure is populated by the associated physicians. Hence, patients are managed impeccably across the range from the office of physicians to the hospital (Bader et al, 2008). The new transformations in the Physician-Hospital affiliation have resulted in two categories of physicians: Hospital-dependent Physicians and Hospital independent Physicians. They're described as follows: 2.1 Hospital-dependent Physicians Physicians who are dependent on their hospitals practice chiefly within the walls of the hospital and are most financially reliant upon the hospital. This category is inclusive of physicians in the conventional hospital-based specialities, i.e. anaesthesiology, emergency medication, pathology, and radiology. Also, this category involves physicians who are in newer hospital-based specialities such as hospital medicine, critical care medicine, neonatology etc. Lastly, it includes a variety of physicians who are, if not, employed or under contract to facilitate with medical director services to various hospitals departments or units. Moreover, it also has a scope for including a variety of physicians of any speciality who are work-persons of the hospital. Many physicians who fall under the category of hospital-dependent are primarily independent practitioners who have advertised and sold their practices to the hospital, and have been elected to become the employees, quite often in response to the economic pressures as discussed previously. The financial fortune of these physicians is profoundly entangled with that of the hospital. In accordance to it, they have a keen interest in the hospital's financial success, and as a result, are more prone to be actively involved in hospital initiatives as designed to enhance safety as well as quality, thereby, removing waste, and improve patient satisfaction (Bader et al, 2008). Their involvement, as a consequence, can be engrossed into their compensation plan or contract, for which they are not penalized for consuming time from their own practice. 2.2 Hospital-independent Physicians This category of physicians comprises of physicians who spend a considerable amount of their professional time taking care of hospital patients, however, who also are in possession of extensive office-based practices. Too often, these physicians benefit the privileges of more than one hospital. However, they will concentrate most of their admissions in one of them. There are a number of specialities that are common among this category of physicians, and all of them are attributed by a considerable degree of financial reliance on their office-based practices, as well as a requirement for accessibility to a hospital in which they perform their respective processes. Examples in this category are physicians that practice orthopaedics, cardiology, gastroenterology, obstetrics and gynaecology etc. Physicians who are hospital-independent are meticulously concerned with the efficacy with which their time at the hospital is consumed, for the reason that much of their income is dependent upon their accessibility to visit patients in their office. They may be considerably hard to convince for taking hospital urgency call with negligible compensation, such as having to leave office to see a patient in the hospital can both lead to lessening their income and create noteworthy intricacies with the patient dissatisfaction. They are also unenthusiastic to commit time for activities such as medical staff administration, peer assessment, and quality assurance for the reason that every now and then they volunteer is an hour inaccessible for income generation or family time. Their trustworthiness towards the hospital is meticulously tenuous. Hence, if they're not pleased with the hospital, they may also terrorize to move their patients to a contender (Bader et al, 2008). 3. The Management of hospitals by Physicians: Pros and Cons The decision of a physician to get into a 'relationship' with a hospital is gaining appeal for some owners in today's world. Now that the new payment configuration is in strict influence, this kind of relationship is capable of providing with a longer life-span for a surgery centre, thereby, bringing capital as well as a sense of risk-sharing to the table (HCPro, 2008). Physicians possess their own levels of stakes which they are enthusiastic about in order to expend with regards to new ventures. They're quite cognizant of their volume of procedures and how committed they are supposed to be to this kind of an effort. For instance, we can argue about the fact that a lot of young and enthusiastic physicians may not possess the capital of risk, or are in practice that is just beginning to develop. As a result, they may not be able to expect the volume of their patients three or five years down the line (HCPro, 2008). There are worrying times for medical professionals for the reason that with a handful of transformations in the health-care system which are almost unavoidable, providers, apparently, who are the true purchasers of health-care services and the largest recipient group in the present system, will conclusively be aimed at in any effort for controlling costs. The conclusive setting-apart of the system which reimburses physicians for ordering more tests and performing more surgery appears inevitable (Alexander, 2009). With paid providers at some of the world's most acknowledged institutions that facilitate some of the paramount quality of patient care at minimal price to the government as well as private insurers, it is possible that extreme political and administrative suppression is going to be brought about so as to bear on the physician. In such an environment, various private practitioners must be in huge ambiguities if the time is appropriate to become a hospital work-person, with some opportunity of making back their investment in services or provisions. It is not an understatement to say that being a hospital-employed provider is not illusionary. Too often, there are drawbacks for both the physician as well as the employing medical institution. Various arrangements between the hospitals as well as physician-owned provisions such as selling price, joint ownership, and profit sharing are even more intricate. A physician who seeks on becoming an entrepreneur considers these types of ventures ought to confer with an attorney who has proper specialization in such transactions. In this section, we will outline the benefits of physician employment, but, more significantly, warn physicians who look forward to take into consideration this move of some drawbacks associated. It should go without telling off that, any verbal assurances by a prospective employer ought to be in the printed contract, or they don't count (Alexander, 2009). 3.1 Pros of Managing Hospitals by Physicians Perhaps the greatest benefit of such hospital employment is that it eradicates all the issues of the financial practicability of a practice. Paying salaries along with the maintenance of a sufficient income are no longer routine issues of concern. Since, most paid hospital-employed physicians are paid for services that are given independent of the patient's capability to pay, taking care for the under-insured as well as uninsured is not a problem (Alexander, 2009). Apart from this, another advantage or pro of management of hospitals by physicians is the conclusion to the governmental dead-aches often occurring in the private practice. The physicians who are hospital-employed, nevertheless, ought to maintain some control of policy as well as personnel that directly influence the patient care. An inexplicable vacillation for hospitals is the determination of appropriate salary method for health care providers. A direct salary with negligible or no productivity incentive may direct to physician smugness, thereby, leaving the hospital deprived of the services as expected by it. However, at the other extreme, a salary which is totally based upon the productivity places the physician at substantial risk, as discussed in the next section that talks about the cons of hospitals managed by physicians. Such 'joint'-venture' partnerships suit the hospital system's overall strategy of physician association. Formal partnerships enable for greater and more intimate associations with physicians as they provide with high quality of care as well as character of the physician investors. Large hospitals can bring about unique benefits to the partnership that the other partners cannot. It is noticed that hospital-employed physicians can help weather the storms on the healthcare illusion. Such physicians or physician groups are capable of enhancing revenues by primarily facilitating accessibility to new payers by means of its managed care contracting. By source of various purchasing contracts, it is possible to reduce expenses by acquiring lower prices for equipment as well as instrumentation purchases. Furthermore, three-way partnerships are of great advantage to the hospitals who involve in doing it. Each of the partners who are involved in the management of hospital or construing it as a business opportunity possess expertise which are beneficial to the relationship by means of cost-savings, quality of care, excellence in clinical as well as economic operation, physician recruitment or development strategy. While a hospital may also get the greatest reward advantage, hospital-based physicians prove to be of great advantage for other reasons too, for example, alliances or additional capital resources. They share risks, and profits, thereby, offering greater long-term benefit where partners agree on a good quality care, excellence in the management, and efficacy of function. Physicians are expected to value the hospitals as partners in such ventures, and ought to attribute much of the success to the qualities as well as proficiency offered by each party. With everyone benefiting from such a venture, and the capability to better serve the community, physicians all over the world, who're interested in such kind of enterprise, should continue to pursue similar opportunities. We can, as a result, sum up the pros with respect to this 'relationship' between hospitals and physicians from a physician point of view. Deeper pockets can help physicians in reducing risk in the venture. Moreover, it is possible for physicians to easily obtain a certificate of need, in case the physician investors are looking to do business in a state that requires such a certificate. Quite often, such a joint venture with a hospital is essential to get a surgery centre up and running because the certificate process is quite political in nature. As a result, with negligible or no hospital support, it could be difficult to obtain a certificate of need (HCPro, 2008). Enhanced amity of the medical staff personnel as a reason of the surgery centre is considered a partner, and not a competitor. Hence, efficacies for surgery centres with respect to payer contracts help them to negotiate for better prices and hence, attain certain payer contracts that they might not have otherwise without the support of hospital. Lastly, valuable management skills and political smack from the hospital are significant assets for a new medication hub. These points, collaboratively, contribute to the pros or benefits of management of hospitals by physicians. 3.2 Cons of Managing Hospitals by Physicians Management of hospitals by physicians is a symbiotic alignment which is supposed to benefit both parties. We've studied above that without physicians it is not possible for hospitals to provide with full assortment of health-care services to individuals or groups. Moreover, in the absence of proper hospitals, physicians would be restrained in their capability to entirely care for their patients. Hospitals offer the environment which is inclusive sophisticated tools and equipments, appropriate technology, assistance staff and proper management methods in which modern medicine can efficaciously be practiced, while physicians have patients, knowledge, capability and proficiency to make efficient use of all that today's hospitals make accessible to them. However, on another level, this management by physicians can prove to be a harsh one. At the minimum, there are economic suppressions that are combated by both the parties which are capable enough of putting them at odds. These suppressions have been significantly incremented by managed care and lower reward prices (Manko, 2005). It ought not to be shocking, as a result, that the hospital-physician relationship is pertinent to a number of different contracts and contractual services. Also, it should not be shocking that, in the present regulatory environs, these agreements ought to be complied with an extensive range of federal as well as state rules and regulations. The health-care delivery configuration has transformed to a great extent from the time when maximum physicians were individual practitioners, or had only one or two partners. Also, the developments in hospital-physician bonds and contracts mirror the developing intricacy of the health care system around the globe. Hence, it is extremely important to abide by all the rules and statutes when the parameters of the hospital-physician relationship are being instituted. It can also happen that, sometimes, hospitals may not agree to pay a physician income that is based on the volume or value of the recommendations that are made by doctors to the hospitals. However, this does not essentially construe to the fact that a hospital fails to pay fair market value to a physician who sells a practice to the hospital (Manko, 2005). Moreover, it also does not restrict a hospital from paying a physician a proportion of the professional element of collections produced by the physicians from the work of their hands. These statutes may negatively influence salary as well as payment arguments from the commencement of the management of hospital, including the recruitment level. Undoubtedly, hospitals must be convinced to comply with these rules and regulations when seeking to encourage a physician to reposition to the hospital's staff while joining a group practice, thereby, paying the doctor for the reposition (Manko, 2005). To sum up, we can thus quote equal number of cons or drawbacks of the management of hospitals by physicians. Amongst the precisely quoted is the distrust of hospital administration for the reason that some physician convict to the fact that administrators possess a different point of view and outline. Moreover, conflict of personalities, opinions, and functioning styles which fail to contribute to an unstable working association between the hospital and the surgery centre is a common issue. Further differences in philosophies and management regimes which can make it hard for the two parties to associate with each other make the relationship even more complicated. Physicians don't always make use of all the accessible management equipments, including technology or consultation of resources. Remarkably, hospitals have quintessentially more of a business or technical approach in their performance. They ideally consult professional businessmen, thereby, using spreadsheets in order to analyze their business. Many a times, hospitals look forward to have regulation in their performance, which is often resented by physicians (HCPro, 2008). Lastly, physician may experience an increased sense of competition as they may construe to a joint venture with a hospital as a partnership with their physician competitors. In case the venture is a hospital-based surgical hub, it is likely that physicians could end up being partners with individuals or people they may not even care for. 4. Conclusion Perhaps, the biggest issue for a physician who becomes an employee is the loss of control. His/her employment situation may transform tremendously with the alterations in the health system associated with ownership or striking deals with competing the extrinsic communes. Many hospitals have gone through financial crises by taking over and managing medical practices, and also injured their physician relations in the purchase, management and suspension of practice ownership. Nonetheless, regardless of a number of failures, there is an increasing resurrection of such activity. The pressures presently experienced by various hospitals to once involve themselves yet again with physicians in business ventures are created by various reasons. However, a chief concern for all the executives and boards of hospitals is how to attain positive outcomes from such ventures in the future at the same time as shunning the losses and over-wrought hospital-physician relationships of the past. A key element for attaining positive results in the future from carrying out activities which have generated huge losses will be the approach of the top hospital executives towards the physicians. While for many hospital executives, business has nothing to do with relationships, for many physicians, all business is individual. References Alexander, I. J. (2009). The physician as employee: Pros and cons. AAOS Now, September 2009 Issue. American Academy of Orthopedic Surgeons. Bader et al (2008). Aligning Hospitals and Physicians: Formulating Strategy in a Changing Environment. Final Report, BoardRoom Press. Governance Institute. HCPRo. (2008). Discover the pros and cons of joint ventures with hospitals. Ambulatory Surgery Coding & Reimbursement Insider, February 2008 Vol. 5, No. 2. HCPro, Inc. Manko, D. A. (2005). Hospital-Physician Relationships Growing More Complex: Contractual provisions in today's regulatory environment reflect legal and economic factors, Reprinted with permission from the May 9, 2005 issue of the New York Law Journal. St. Luke's Health Initiatives (2005). Can This Marriage Be Saved Physician-Hospital Relationships. Arizona Policy Primers, St. Luke's Health Initiatives. Stevens, R. (1989), In Sickness and Wealth: American Hospitals in the Twentieth Century, New York: Basic Books. Read More