How to Build a Physician Alignment Strategy

Most health system executives rank physician alignment as one of the top priorities. With the shift from volume toward value-based reimbursements, a tight collaboration between physicians and systems is a necessity, making physician alignment even more of a top concern. Unfortunately, many healthcare organizations approach physician alignment with outdated strategies and priorities.

Health systems need physicians to share the goal of decreasing utilization while still delivering quality care. Physicians once heralded as heroes for the revenue they brought to the hospital may now be viewed as threats to share-savings contracts. Therefore, health systems must find ways to structure a symbiotic relationship with physicians, whether employed by the organization or independent, to better navigate the transition from volume-based to value-driven healthcare delivery.

To be successful in the value-based market, health organizations must approach physician alignment with a flexible approach. However, five key principles seem to be consistent within any successful physician alignment strategy.

#1 Early buy-in. Work collaboratively with key constituencies, including employed and affiliated physicians, to set strategic objectives for the healthcare organization. Define the vision and clinical capabilities needed. Invite physicians to participate in the planning process. Listen to their challenges and identify advocates to support your strategy. Include physicians early on to instill trust, which is pivotal in any successful alignment strategy.

#2 Identify partner physicians. Different physician characteristics are needed to reach different goals. Healthcare organizations need to research physician data to identify the best suited physicians to complement the strategy. Leveraging physician advocates in the design and deployment will aid in better understanding the physician community and ultimately, converting or culling any dissenters.

In a value-based environment, patient outcomes, reducing the cost of care, average length of stay, quality scores and patient satisfaction are typically among the most relevant metrics. Most systems are unable to analyze a providers’ performance at this level of detail.  Despite the challenges of this data acquisition and analysis, healthcare systems must analyze variation within each physician’s practice patterns and behaviors as these will determine a system’s success.

#3 Develop multiple strategies.  Some healthcare organizations believe employing physicians is key to alignment; however, highly engaged independent physicians are often the most capable of driving performance. While, employment may make sense for some systems, co-management agreements (contracts between hospitals and physician groups to improve a service line) may be a better alternative. Medical directorships, when properly constructed, may also be sufficient to obtain physician alignment. However, to succeed, an alignment strategy should include a combination of mechanisms

#4 Empower physicians. In order to align, physicians must be engaged. In order to engage, healthcare organizations need to listen and take steps to amplify the voice of physicians. To enact long-term change, physicians must be empowered to act and lead change.

All too often, physicians feel isolated or cut off from the strategic decision-making process. Directorships and department chair positions often give physicians the ability to drive activity, but these positions may not be the best choices to lead change. Some systems may need to change leadership assignments to better connect strategic goals with physician goals. Or create new positions that drive change.

Some healthcare organizations can offer additional channels for physician input and feedback, but in order to engage, the organization must act upon the feedback. Simply collecting paper from the suggestion box is not enough as inaction to feedback will only further weaken the hospital-physician relationship.

Healthcare organizations also need to find ways to engage physicians who do not have admitting privileges. Collaborating with physicians who work in ambulatory care settings or post-acute facilities can be critical in value-based reimbursement.

#5 Create an incentive model. Changing behavior for the long-term requires a reward loop and compensation is one component. Compensation agreements must be transparent with clear measurements. The measurements should be tracked and reported upon in regular increments.

Although important, compensation alone does not ensure long-term change. Enhancing patient outcomes is a clearly a reward. This non-financial metric creates internal motivation and personal responsibility, and grows a culture of collaboration among team members and physicians alike.

A flexible incentive plan that takes into consideration personal motivation and financial rewards will set the bar for long-term change.


Physician alignment may be difficult to navigate, but the journey will help identify opportunities for improvement in both clinical and financial performance. The process may take time to design, socialize and deploy, but the end result is worth the effort. Aligning physicians improves quality of care and builds a more sturdy financial foundation for the health system and providers alike.

If you’re interested in looking to align independent or employed physicians or a combination of both at your healthcare organization, let Dynafios help. We specialize in physician alignment having successfully managed hundreds of hospital-physician agreements. Our team of consultants can help guide you through the process and measure initiatives by leveraging our healthcare analytics platform. You can visibly monitor progress at every step along the way. Plus, we offer a physician contract compliance app to help automate the process and ensure compliance. At Dynafios, we will create and implement the best physician alignment strategy for your healthcare organization. Your success is our success.

Give us a call at 877.858.3282. Learn how we can help you engage and align physicians to enhance patient outcomes and improve financial performance.

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