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Hospitals and Physicians Working Together


Relations between hospitals and physicians have never been especially warm. But the hospitals need your referrals and your patients need the services that hospitals provide. So how do you work together?

Recently I attended the annual conference of a group of hospital executives whose jobs include discerning what you, dear physicians, want from them - and how they can get what they want from you. What I learned was eye-opening.

Relations between hospitals and physicians have never been especially warm. But the hospitals need your referrals and your patients need the services that hospitals provide. That mutual need has long been a counterweight to any mutual resentment, and so an uneasy balance of power has long maintained for decades.

But tensions are running higher as the power equation is rebalanced, apparently in hospitals’ favor. They’ve been buying up practices like crazy these last five years, employing as many physicians directly as they can handle. They want market share, of course. And they want to position themselves for a future healthcare economy where payers reward value as defined by outcomes and patient satisfaction, and don't just blindly pay for services. Physicians, meanwhile, are increasingly attracted to the idea of employment, which seems both economically safer in a very challenging industry and saner from a work/life balance perspective.

But now comes the really hard part. You've heard of the Pottery Barn rule: if you break it, you bought it. Well, hospitals are dealing with the Reverse Pottery Barn Rule: They bought it, and now they better not break it. If hospitals are "winning" this ancient power struggle, what struck me at the conference of hospital suits - and these were marketing execs on the front lines of trying to attract and retain your referrals, not CEOs - is how happy they aren't about their emerging status as dominant players. You'd think they'd be dancing in the end zone, but instead they're nervous. Scared, even.

For starters, they’re discovering to their consternation that their acquisition of local practices hasn't made it easy to control the doctors who work in them. They've laid a lot of money on the table acquiring physician groups and now they need to start seeing a return on that investment, but it's not uncommon for hospitals to acquire medical groups, only to discover months later that the group's referral patterns haven't changed much, if at all, in the hospital’s favor.

One speaker at the event told me, in a conversation later, that her own firm's research on behalf of hospitals consistently finds that physician attitudes toward referrals boil down to this: Earn it.

And referrals are only the beginning. The hospital systems that will win in the brave new world of value-based payment are the ones that get physicians like you - regardless of whether you're hospital-employed or independent - to line up, more or less, with the hospital's way of doing things, from the use of hospital IT systems to following its clinical protocols on key patient groups. For the hospitals, it's not enough that they employ you; it's becoming a business imperative that they find a way to get you to embrace its culture.

What does this mean for you? It means that you need not and should not be a passive partner. Figure out what your hospitals need from you, and make them earn it.

Bob Keaveney is the editorial director of Physicians Practice. Tell him what you think at or on Facebook: Unless you say otherwise, we'll assume that we're free to publish your comments in upcoming issues of Physicians Practice, in print and online.

This article originally appeared in the November/December 2012 issue of Physicians Practice.

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