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Solving Healthcare’s Risk-Sharing Riddle: Hospitals Turn to Physician Leaders for Answers

November 05, 2014 17:18 PM (GMT-04:00)
Healthcare News

Physician LeadersAs a consultant to health care executives on organizational design, the number one priority I hear from my clients these days is finding physician leaders capable of implementing change across their organization. If you wonder why physician leaders as opposed to CEOs, CIOs or even Chief Clinical Officers, consider these facts. 

Shift to Risk-Based Contracting is Fast and Furious

Sixty percent of health care executives say their organizations will participate in risk-based contracts within the next 12 months, in addition to 20% who have already made the leap, according to ITG Market Research. This marks a rapid and drastic change in how providers will be paid.

As to the financial outcome providers can expect, the best indication we have is from the Centers for Medicare and Medicaid Services Pioneer Accountable Care Organizations (ACOs). The most recent CMS report provides data following two years of implementation. The results underscore just how difficult of a transition it is, especially given that the participants are some of the industry’s most experienced in risk-sharing.

Transition is Dicey, Even for the Industry’s Most Experienced

Of the original 32 ACO participants, 41% have dropped out citing the high cost of implementation or other factors; 34% met quality requirements and reduced costs enough to earn shared savings, ranging from $1.22 million to $13.4 million; 34% shared losses, averaging payment of $2.33 million back to the Medicare program; and the remaining 16% shared in neither gains nor losses.

At the center of the challenge is the need for providers to institute new protocols that will simultaneously meet three objectives, referred to as the “Triple Aim”: 1) Improved patient experience (quality and satisfaction), 2) Improved health of populations, and 3) Reduced per capita cost of healthcare.

Physician Engagement is a Deal Maker or Breaker

While process design, technology and financial modeling will all play an important role, without the right physician leader(s) engaged in the design and implementation of new protocols, the rate of adoption among practicing physicians will fall short.

The CMS’s ultimate goal is full-risk contracts based on population health management. As a result, practicing physicians will no longer be able to autonomously determine a patient’s care plan. Instead, they will be asked to follow data-driven protocols. This comes with a significant shift in the mindset and self-perceived status of a physician. Therefore, how and by whom these protocols are determined, implemented and evaluated has a major impact on physician acceptance and organizational success.

Not All Physician Leaders Up to the Task

Even health systems that understand how important it is for physicians to lead the change have encountered pitfalls. In my experience, breaks in progress were most often attributed to putting unsuitable physician leaders in transformational roles, such as Chief Clinical Integration Officer, Chief Quality Officer or Chief Transformation Officer. The common thread is that their prior experience was in the wrong kind of settings. For instance:

  • A candidate from a managed care setting who doesn’t understand the inner workings of a hospital;
  • A physician who is highly competent in quality care delivery measures but lacks the technical knowledge associated with value-based reimbursements; or
  • A candidate from a medical group setting or smaller hospital who has experience with quality initiatives but is unable to apply it to a large, complex health system setting.

In contrast, the experience and attributes you want to look for in a physician leader include:

  • Well-respected practitioner recognized for delivering the highest quality of care.
  • Strong knowledge of Medicare reimbursement requirements and the ability to articulate them to the organization.
  • Prior experience leading or actively participating in initiatives focused on quality of care outcomes.
  • The ability to identify key metrics and use data analytics to extrapolate clinical patterns, outcomes and best practices.
  • Collaborative leader, with excellent communication skills able to garner trust and influence peers.

The bottom-line is that changing behavior is difficult. It takes a physician who is a problem-solver, highly credible and dynamic enough to instill enthusiasm among practicing physicians to move to a new model.

About the Author

Deedra Hartung is the Senior EVP and Managing Director of Cejka Executive Search, one of the top five largest health care executive search firms in the U.S. She works with Boards of Trustees and Search Committees to help identify an organization’s leadership needs and national executive talent within health care. Deedra was recognized as one of the top women leaders in the health care industry by Becker’s Healthcare and is a frequent guest speaker and published contributor on the topic of health care leadership. Deedra Hartung can be reached

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