Understanding Physician Alignment
- April 17, 2018
- Posted by: Cherie Blehm
- Category: Blog, Healthcare Consulting, Physician Alignment, Physician Engagement
Hospitals and health systems often rank decreasing healthcare costs and increasing efficiencies as top concerns. However, many healthcare organizations have struggled to implement and sustain health cost reduction initiatives without implementing physician alignment strategies. It is becoming increasingly clear that healthcare systems are becoming dependent on physicians to successfully adapt to the ever-changing healthcare regulatory landscape in order to succeed in this new age of healthcare. Thus, physician alignment is pivotal for a health system to reach business goals, especially with value-based reimbursements.
A Deloitte survey discovered that physicians who do not feel aligned or engaged with their healthcare system are more likely to resist alternative payment models. Almost 75 percent of the providers surveyed said they preferred fee-for-service, citing organizational inadequacies for value-based reimbursement as a top reason.
Deloitte experts stated that provider alignment starts with physician activation in business goals. Deloitte defined “physician activation” as:
Physician activation occurs when healthcare systems and physicians are motivated and encouraged to evolve their behaviors through deliberate and structured engagement in order to drive business results. The powerful combination of behavior change and aligned incentives can enable organizations to activate their physicians to be the driving force of improving care, experience and efficiency.
In simple language, everyone must come to the table, listen and be on the same page.
The report stated that physician alignment strategies that aim to enhance the healthcare revenue cycle should account for provider behaviors. Strategies should incorporate methods for changing the cue, routine and reward loop.
The cue is identified as a trigger that launches a behavior. Change the cue and you can change the behavior. Then create a routine based upon the cue.
Physician behavior depends on a routine or habitual activities that are initiated by cues. For instance, physicians know to put on the appropriate dressings before entering an operating room and perform safety checks prior to operating. Finally, providers determine if a behavior is worth repeating based on the reward, such as improved patient outcomes or reduced healthcare costs.
Many healthcare organizations have implemented failed physician alignment strategies by focusing mostly on the reward. While important, rewards are deeply personal and one-size does not fit all; therefore, rendering the alignment strategy unsustainable.
However, healthcare organizations can change behaviors by creating a loop into the physician alignment strategies. The loop may create behavioral biases that can make the healthcare revenue cycle inefficient. For instance, physician preference items typically increase the cost of healthcare for hospitals and health systems. Preferred items can represent up to 61 percent of health care supply chain spending. This is largely due to the fact that physicians do not know how much their preference items cost. In a 2016 study, orthopedic surgeons only correctly estimated the cost of a commonly used implant 21 percent of the time and their estimates ranging from 0.01 to 24.6 times the actual cost.
Allowing physicians’ the ability to choose different items can also add to the cost of healthcare. Often the health system must work with multiple vendors, which then creates greater spending variation for essentially the same items. And, physicians may not know that their preference items for specific services cost significantly more than similar items, despite providing the same performance and patient outcome.
Developing an appropriate and sustainable physician alignment strategy is key to avoiding healthcare cost increases stemming from provider biases. But this is just the first step. Bringing all stakeholders to the table so everyone understands the process and what defines success is vital as well. For that, having an experienced third-party guide the process is advised so there is a neutral representative helping with collaboration, communication and measuring results of the initiative.
Need a sustainable physician alignment strategy? Ask Dynafios. We’ve successfully designed and guided hundreds of healthcare organizations through the physician alignment process. Our team of healthcare consultants help hospitals and health systems achieve physician alignment resulting in enhanced patient outcomes and improved financial performance.
Learn more. Give us a call at 877.858.3282 or email info(at)dynafios.com.