Top Strategies for Positive Hospital-Physician Relationships

How to Maintain Positive Relations Between Hospitals and Physician Employees

Group of doctors meeting in a conference room
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The physician workforce has gradually shifted over the past ten years from being primarily self-employed to being employed by hospitals or health systems. This trend has probably not been as noticeable for newer physicians, who likely started their careers as employees. However, more experienced physicians may have struggled with the transition from practice owner or partner to employee. Some physicians who may have spent years owning and operating their own practices as a sole proprietor or as a member of a partnership are now finding themselves working as employees, and reporting to a manager or supervisor in some form.

Additionally, as much as many physicians have dreaded the transition out of business ownership to working as employees, many hospital administrators are probably equally excited about the added responsibility of managing a staff of employed physicians.

This has likely resulted in some growing pains on both sides of the table. So how are hospital administrators and practice managers coping with this newly added set of duties and responsibilities related to managing their physician workforce, while maintaining morale and a positive work environment for their physicians? This can be especially challenging for smaller systems with fewer resources, or those in rural areas.

Physician Management Strategies to Engage and Retain Physicians

For answers as to how to successfully engage and support physician staff members, managers in need of advice can look to other hospitals and health systems that have been successful with physician employment and retention thus far.

For example, Southern Tennessee Regional Health System in Lawrenceburg, TN invests in a variety of strategies and programs for the benefit of its physicians. To try to keep physician morale high, the administration "includes them in the decision making, strategic planning, and all the celebrations for the small wins in HCAHPS and goals that have been set for the company to achieve," states Tina Holt, director of business development at STRHS.

When asked what resources and strategies they utilize to maintain a positive work environment for physicians, Holt shared that STRHS "has a great physician practice management team that interacts with the physicians constantly. They offer support with office issues to make sure the physician's practice is running smoothly."

Even with excellent support from the hospital system and the community, certain policies and procedures may still be a tough sell for physicians, especially those doctors who are used to having a lot of autonomy as a former practice owner. How can hospital employers get physicians to buy into new service lines, initiatives, or policies and procedures?

"We have what we call a PEG (Physician Engagement Group) that a select group of providers serve on each year," Holt explained. "It acts as a sounding board for the CEO. Meetings are held once a quarter off campus at dinner time. There is usually very good discussion and feedback at these group sessions."

Many systems have added to their teams of physician relations and liaisons to help keep the lines of communication open between the physicians and hospital administration.

Employment May Not Be the Best Answer for All Health Systems or All Doctors

When hospitals employ physicians, it doesn't always go as planned or as hoped. It depends on a number of factors, including physician and community demographics. One physician liaison at a rural community hospital, who spoke on the condition of anonymity, said that one way to make her local physicians happiest is to "go back to about 1970."

This particular physician community is comprised of many older physicians, in a rural area of the Southeast. Understandably, due to the local physicians' level of tenure and years of experience as practice owners, all the added changes in the industry, on top of the changes that come along with the transition to becoming an employee of a hospital, are just too much for some physicians to take on at a later point in their medical careers.

She added that employing physicians proved to be a difficult challenge for her hospital, so much so that the hospital administration abandoned the employment model shortly after employing a few different specialists. They've since turned to outside management and staffing companies to maintain hospital-based specialists such as emergency medicine and anesthesiologists, and all other physicians in the hospital's draw area are self-employed in private practice.

"The hospital administrators felt there was too much oversight and additional resources required to employ the physicians, so they divested of several of the groups and now only employ a very small number of physicians," she stated, adding that several of the physicians in her community have resisted implementation of EMR and other updates to their practices, yet they remain busy and productive. The hospital cannot force the physicians to make these updates or change their practices, as the physicians are not employed by the hospital.

Since the hospital administrators in this scenario are unable to go back in time to simplify the healthcare industry for their doctors, they instead "just try to offer as much support as possible, in terms of marketing, staffing, resources, new service lines and equipment, etc., as well as do whatever we can to alleviate as much of the administrative burden as possible, as that seems to be a top challenge for many of our physicians."

Despite the setbacks in a few cases, physician employment seems to be a trend that is here to stay. For example, 92 percent of the physicians placed by The Medicus Firm, a national physician recruiting firm, were hired by hospitals as employees, not placed into private practice. "Ten years ago, probably about 80-90 percent of our physician candidates would have been placed into private practice settings," states Jim Stone, president of The Medicus Firm, "today, the statistics are nearly reversed."

Stone goes on to add that previous physician practice surveys the firm has conducted in the past have revealed that physicians only prefer employment out of necessity, not because they no longer wish to have autonomy. "On the other hand, newer physicians who have entered the workforce within the past three to five years, do not know anything different. They started their physician careers with the ACA, EMRs, and the physicians-as-employees trend already in full swing, so this is their norm." Therefore, the industry and workforce changes that are causing stress to experienced physicians are not causing the same angst to newer physicians, Stone concluded.

Are Employed Physicians Better for Patient Care?

There are not yet many studies available on how physician employment impacts the quality of patient care. However, as with any industry, happy employees are productive employees, and the same is likely true for physicians. If a physician is stressed out about his or her job, he or she may be less likely to perform well or at the top of his or her capabilities.

A 2017 CNN report revealed that employing physicians, combined with changes brought about by the Affordable Care Act (ACA, also known as Obamacare), has allowed hospitals to charge more money for the exact same procedure, conducted by the same physician, in the same operating room as they charged when said physician was in private practice. It is unclear exactly what can be done to alleviate the financial impact of physician employment on the patient community.

The key seems to be finding the right balance between happy, productive physician employees, well-cared for patients, and financially sound hospitals.

Should Hospitals Focus on Doctors First?

Many hospitals are rightfully accustomed to focusing on patients first and foremost. Of course, a hospital's ultimate mission should always be to care for its patients above all else. However, part of that equation is providing the highest quality of care possible, and physicians are needed to do so. Now that hospitals are employers of physicians, many hospitals may need to adjust their energy and focus to at least some of that energy toward its physician staff. Richard Branson, a public figure and well-known business owner, has been widely cited as saying that customers don't matter—employees do. "We take care of the employees, and they take care of the clients," Branson has been quoted as saying.

Could the same be true for hospitals, physicians, and patients? Many people do not care to compare hospitals to corporations or compare patients to customers. However, there are parallels, and hospitals certainly cannot provide quality care for their patient population without physicians.

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Article Sources

  • LaMott, S, "What Doctors Think of the Affordable Care Act,", January 17, 2017.
  • The Medicus Firm, 2017 Physician Placement Summary Report, February 2017.