Hospital-Physician Relations of the Past Could Hinder the Future

August 21, 2014

Hospitals are gearing up for shared risk and quality requirements under the Affordable Care Act that will affect hospital-physician interaction.

Hospitals and hospital systems are experiencing a fee-for-service windfall from the Affordable Care Act. For now.

As the reform law is more fully implemented, hospitals and hospital systems will have to substantially step up their game to provide higher quality at a reduced cost as their reimbursement is shifted from a fee-based system to shared risk in the next several years.

In a way, this is unfair to hospitals because they have almost no direct control over utilization. Physicians have such control, whether they are employed by the hospital or not.

Theoretically, similar programs for physicians to improve quality at reduced cost will align incentives. But, will they really?

Probably not.

The pressure from and on hospitals to stay fiscally viable on less volume with limited control over outcomes and no control over physician utilization will become increasingly intense. So will the pressure on physicians from hospitals to control quality, patient satisfaction, preventable and unnecessary utilization, adverse outcomes, and medical errors.

Hospitals will transform their traditional overtly or covertly adversarial relationship with physicians into functioning collaborative partnerships. Unfortunately, the mutual distrust built over decades of institutional dominance and physician fragmentation perpetuating that dominance makes for a soft and unstable foundation.

This mutual challenge of true and sustainable collaboration is doubly difficult because hospitals have traditionally taken credit for physicians’ skills and successes although performing in a supporting role. The media has perpetuated this fiction and government has bought into it, both out of ignorance on how things really work. It’s like a theater taking credit for a great play.

One cannot exist without the other and working together with no victor and no vanquished is a tall order.

Having spent considerable time in my career running the healthcare theater in one juncture and putting on the healthcare play in others, I am hopeful that the two can come together; but, I am cautious. Physicians, with a unique perspective into human nature and the traditional hospital-physician relationship, will be right to be cautious as well.

Government, in particular, has a role to play in leveling the playing field and aligning incentives and reinforcing commonalities.

But policy makers will have to step back from the lobbyists and speak to the people who actually have to make things happen. That would be physicians, too.

It’s not too early to speak up.