Physician Partnerships with Health Systems

Part 3 of our series “Should I Stay or Should I Let It Go?” 

In Part 1 of our series (Medical Practice Consolidation & Physician Practice Viability), we discussed medical practice consolidation trends and the pandemic’s impact on the healthcare system and physicians in practice. We offered a practice viability self-assessment and recommended performance improvement actions to “Stay the Course.”

In Part 2 Partnering with Others, we highlighted a variety of partnership options for physicians to consider including investor-owned companies that offer new models of clinical practice as alternatives to the fee-for-service treadmill.

In Part 3 Physician Partnerships with Health Systems, we discuss the history of physician partnerships with health systems and the pre-Covid dynamics of these ventures. With the arrival and persistent reality of Covid-19, and from a health system’s viewpoint, we highlight the strengths, weaknesses and opportunities for medical practice partnerships with a health system today during a pandemic.

PHYSICIAN PARTNERSHIPS WITH HEALTH SYSTEMS – PRE-COVID

Physician Practice Integration – The Strategy

Physicians and their practices have been integrating into health systems for many years.  Less than twenty years ago in 2000, fifty-seven percent of physicians were caring for patients in independent practices. ²² As mentioned previously, hospital ownership of medical practices was relatively constant in the late 1990’s to early 2000’s, but then this phenomenon increased by more than 50% from 2003 to 2011. Then in 2018, for the first time, there were fewer physician-owned practices than employed physician arrangements nationwide.

Historically, a hospital or health system’s rationale for employing primary care or specialty physicians and incorporating their practices helped to ensure downstream referrals to hospital emergency departments and inpatient units, hospital-owned laboratory and radiology testing, diagnostic procedures, and surgery services. Having these practices as part of the health system helped to ensure “brand loyalty” for patients needing surgery, emergency services, or hospitalization. Assimilating medical and surgical specialty practices made hospitals more competitive and protected their market position in the provision of high-end specialty services.

With the growing concern for overutilization of unnecessary services, and the advent of accountable care and value-based care payment arrangements, health systems pivoted to include primary care in their strategy to help drive improvements in cost and quality across the health continuum. However, with the consolidation of medical and surgery practices into health systems, the cost of care often has not improved and has in many markets actually increased. Health systems have much larger overhead and participate in heavily weighted fee-for-service payment arrangements to include facility fees, thereby increasing the cost of provider office visits and not necessarily with demonstrated or related improvements in outcomes and the quality of care delivered.

In more underserved rural communities, the incorporation by rural hospitals of community physicians and their practices has ensured survival of these practices to meet the needs of the community.  Faced with increasing downward reimbursement pressures plus rising infrastructure costs (e.g., staff, IT, medical equipment, etc.), many practices had no choice but to partner with local hospital to stay in business. These partnerships ensured the survival of the both the practices and the hospital, not to mention ensured access to care for patients.

Infrastructure Resources and Support for Physician Practices in Health Systems

Hospitals and health systems can offer resources to physicians that they could not afford on their own, to include expanded support teams, human resources, IT support, purchasing etc.  However, hospitals have not proven to be experts in medical practice management, and often when a medical practice is brought into the system, the practice must compete for resources with the more lucrative fee-for-service hospital departments.  Furthermore, the investment per provider can potentially exceed expenses of private practices, as the business model of hospitals often requires increased overhead due to regulatory modifications to buildings and processes.

At the same time, physicians moving from solo practice into a hospital-owned medical group have found support being part of a team of colleagues, and if they are well represented leading clinical quality improvement efforts, the experience can be rewarding.  In addition to a relatively stable salary arrangement, physicians joining a health system can take advantage of a collegial, team-based environment and better work-life balance through nurse triage supported by the hospital and sharing after-hours call with a larger number of colleagues. Care management, pharmacy support, compliance expertise, and coding guidance may also ease the administrative burden. In addition, physicians joining an academic medical center have an opportunity to broaden their work to include teaching the next generation of physicians, in addition to their clinical work with patients.

Practice management services provided by the health system can include IT support, data analytics, and decision- support as well as revenue cycle management services. The capital needs for the practice are also shouldered by the system, including maintenance and equipment.

Partnerships with Health Systems in a Pandemic — Considerations for Physicians

When physicians consider leaving their private practice to join a health system, health systems typically offer direct employment and sometimes medical leadership roles in the organization. Before the pandemic, physicians may have been contemplating partnerships with health systems as a way to reduce reimbursement risk, offer a steadier salary stream, and gain access to more resources that could help take better care of their patients. Where physicians consider placing their alliances or collaborations to help take better care of their patients is important, as is the type of relationship that is offered. For example, is there more of a partnership philosophy or a pure employment strategy? What are the mission, vision, and values of the organization?  Do these tenets resonate? Is there more of a focus on “the bottom line,” and does that focus override the quality experience the physician comes to expect?  Making sure priorities are aligned is key to partnering with or becoming employed by a health system.

The COVID-19 pandemic has applied significant operational and financial stress on health systems nationwide. Given the pandemic will be with us for a while, physicians considering partnering with a health system should ask how it initially responded and continues to respond to the pandemic. How have physicians who are part of the organization been treated in their relationship with the health system pre-COVID and today?  How have all team members been treated regardless of the role they play in caring for patients – a physician, a nurse, or an environmental services worker? The response to the pandemic is an important litmus test for physicians considering joining a health system.

In general, what resources are available for physicians to take the best care possible of their patients? What human resource support is provided?  Are IT/EMR support and data analytics part of the package? During the pandemic, was telehealth available or rapidly developed to provide access and continuity of patient care?  Readily available and meaningful data is becoming even more important for taking care of an entire population rather than relying on fee-for-service types of transactions. Did the availability of these resources change, or did they have to be redeployed due to COVID-19? Was this support replenished as the health system adjusted to the pandemic and stabilized?

Some health systems are further along than others in the population health and value-based care transformation journey. How integrated and involved are physicians in this transformation?  Whether physicians consider joining a health system or an MSO, what is the type of integration happening for the entire healthcare team?  That is the lens that is most important as a physician considers the daily experience, the relationship, and what it would look like going forward.

Fast Forwarding Through COVID With Innovation

Fast forwarding through COVID, we have all experienced challenges with the pandemic. COVID did not come and go as many of us anticipated. Across the country, medical practices and health systems have been coping with multiple waves of outbreaks of the virus, which stresses providers and taxes healthcare resources.  The pandemic will be an ongoing challenge, but it also provides an excellent opportunity to consider how our health systems, Medical Services Organizations (MSOs), and Clinically Integrated Networks (CINs) have responded and will respond to the ongoing challenges of the pandemic. How are they meeting the needs of patients where they are?  For example, as mentioned previously, how have these organizations tackled innovative care delivery options like telehealth and improved access to care for patients?

What types of data have been made available to address gaps in care as well as to address the needs related to COVID?  The pandemic has been a challenge for us all and watching and observing how organizations react and respond to COVID is an excellent exercise to consider other pivot points, and stress opportunities with performance. What does the relationship look like?  Was there a change, positively or negatively, in the partnership with their physician leadership or others who are part of the healthcare team?  How did the system respond and how were they received within the community?  These are all very important questions to ask as physicians consider who their best partners might be.  And how or when is the ideal time to consider that jump or transition if you are considering alignment with another partnership?

What can we expect for the future? COVID is not behind us, as it is still in front of us and has changed healthcare overall for all going forward.  For example, what kind of ongoing resources and platforms are available for telehealth connections?  How about remote monitoring devices for patients who are in a practice or in acute care? How will we take technology to the next level and ensure this progress will continue going forward?

How will the pandemic change physician-health system partnership strategies?  What is on the horizon?

“We really thought that this pandemic was going to be a short-lived phenomenon, but we are finding that this “new normal” will transform how we deliver care in the future permanently.”  ~ Saria Saccocio, MD, FAAFP, MHA ²³

The strengths and weaknesses of physician-health system integration have been highlighted by the reality of living and working with a deadly pandemic that, to date has killed more than 500,000 Americans and counting. Frontline health workers have put their lives on the line like no other time in modern healthcare history. Shortages of testing resources, personal protective equipment, and, during its peaks, of hospital beds have shaken the industry.  Medical practices were forced to close altogether or greatly reduce their capacity to see patients.  Many patients have not yet returned to doctors’ offices even months later, and there is growing concern that especially those with chronic conditions will lose ground in managing their care in partnership with their physician.

Primary care practices and selected specialty practices within health systems experienced the same challenges as their colleagues in the community during this time. However, health systems with adequate resources and stronger balance sheets were able to avoid or minimize layoffs and salary reductions for their providers.  Some were not so lucky. Rural hospitals and the practices in these communities have suffered disproportionately, not unlike the communities they serve.

Since the pandemic, some hospitals and health systems are questioning once again their strategy to integrate medical practices into their systems, while others are more resolute to continue and even accelerate physician practice integration to be successful with their value-based care efforts.

The benefits of partnership between a physician and a health system for salary support were highlighted or demonstrated a weakness, with some organizations having to layoff providers and/or reduce their salaries.  These issues were short-lived in many cases, with volumes rebounding to pre-Covid levels and sometimes higher.

The explosion of telemedicine in medical practices has had health systems rethink their master facilities plans. Telemedicine adoption by consumers and providers reached a peak in the early months of the pandemic but has settled into a more routine channel for patients to communicate with and receive treatment from their providers. Early estimates during the outset of the pandemic predicted as many as 30% to 50% of traditional in-office visits would shift to virtual visits. As systems have adjusted to the pandemic, in-person visits have rebounded, and telemedicine visit volumes medical visits are settling in at a lower rate (e.g., 15-20%). Telemedicine utilization rates for mental health and behavioral health are staying much higher (e.g., 85%). Exactly where telemedicine volumes land will depend on the area of the country, broadband capabilities (e.g., rural vs. urban), and, most importantly, provider and patient adoption. In the meantime, health systems are pondering how they will adapt their bricks-and-mortar facilities and space planning to the new reality. What will be the best way to utilize thousands of square feet of potentially unused exam room space?

Coming in Part 4

In Part 4 – Accountable Care and Physician-Health System Partnerships, we will describe the impact of accountable care and value-based reimbursement on health system-physician relationships. The health-system sponsored Clinically Integrated Network (CIN) is one option for physicians to remain independent and still participate in the accountable care movement. However, physicians can participate and succeed in value-based care transformation by joining non-health system driven Accountable Care Organizations (ACO’s). Physician-led, private equity-backed ACO’s have become increasingly viable options for physicians and their practices to remain independent and be successful in improving care and reducing health care costs. 

ABOUT THE AUTHORS

Amanda Hopkins Tirrell, MBA, FACHE

For over 30 years, Amanda Hopkins Tirrell, MBA, FACHE has partnered with physicians in academic medical centers, integrated healthcare delivery systems and medical group practices across the country. An energetic change agent with a reliable track record in transformation, operations management and establishing a culture of patient service excellence, Ms. Hopkins Tirrell is a knowledgeable advisor and mediator in developing collaborative alliances and partnerships with physicians, hospitals and community organizations.

Based in North Augusta, South Carolina, Ms. Hopkins Tirrell is President and Founder of Hopkins Tirrell & Associates, LLC a health care management consulting practice offering strategic and operational management solutions to health systems, academic medical centers and physician practices. Consulting services include clinical strategic planning, patient access redesign, behavioral health solutions, physician engagement and network development. Physician practice advisory services include business growth, revenue cycle management and contracting strategy, as well as individualized leadership development, career planning and compensation strategy.

Most recently, Ms. Hopkins Tirrell served as technology strategy advisor for Mass General Brigham’s Chief Information & Digital Officer. As a member of the CIDO’s digital transformation team, she focused on senior stakeholder engagement and digital patient experience transformation to include digital front door redesign and CRM technology implementation to support access improvement and call center optimization. Key deliverables included developing the Digital Patient Experience Strategic Plan & Roadmap and Governance Strategy & Implementation Plan.

Ms. Hopkins Tirrell holds an MBA in health care management from the Wharton School and is a Fellow in the American College of Healthcare Executives.

Contact: (413) 427-4714 (cell) — email: Amanda@hopkinstirrell.com

Saria Saccocio, MD, FAAFP, MHA

Dr. Saria Saccocio is the Chief Medical Officer for Essence Healthcare, of Lumeris.

Dr. Saccocio has demonstrated a consistent history of leading award-winning programs and improving patient care and safety across the continuum as a Chief Medical Officer for health care delivery systems, including on the payer and health system environments. She received her Doctor of Medicine from the University of Florida, and her Executive Master of Health Administration from the University of North Carolina-Chapel Hill. She completed her Family Medicine residency at the University of Miami before opening her own solo family practice. She continues to serve patients at the Greenville Free Medical Clinic.

Becker’s Hospital Review has recognized Dr. Saccocio as one of the top 100 Hospital and Health System CMOs to Know and has been elected to the Alpha Omega Alpha Medical Honor Society. Her extensive civic involvement has included serving with many national, state, and local community organizations such as: the Modern Healthcare Women Advisory Board, Pisacano Leadership Foundation, South Carolina Hospital Association, United Way of Greenville County; Greenville Free Medical Clinic, the South Carolina Academy of Family Physicians, and is an Alum of the Women’s Leadership Institute and the Diversity Leadership Institute and Women of Distinction for Women’s Basketball at Furman University.

Contact Dr. Saccocio at:  Saria.Saccocio@gmail.com

REFERENCES

Part 3 – Physician Partnerships with Health Systems

22. “New Data on Physician Practice Arrangements: Private Practice Remains Strong Despite Shifts Toward Hospital Employment,” by C. Kane and D. Emmons, American Medical Association (September 2013)
23. “Should I Stay or Should I Let it Go? – Accelerating Post-Pandemic Partnerships” South Carolina Medical Association Webinar, A Hopkins Tirrell and S. Saccocio, MD (June 2020)