Becker's Hospital Review

Becker's Hospital Review CEO Strategy Roundtable 23 are not legally allowed to employ physicians. It's probably the only thing we share in common with Texas. We started a medical foundation. We were the last to develop a medical foundation, so we have been able to learn. We embarked on this three years ago. Less than 10 percent [of our physicians] are employed via the medical foundation. On labor and layoffs Joe Fifer:  Of course, I've heard handfuls of stories about layoffs. I still think that's the exception. What I am hearing is a slowdown in hiring. There are many organizations that are going through process re-engineering, those kinds of efforts, and some do it with a no-layoff policy. They are trying to reassign and redeploy [staff] to avoid a layoff scenario, but they also are avoiding hiring new people. (From left) Quint Studer and Michael Sachs answer Scott Becker's questions. People are wired a certain way. It's not just about the money. The money is the end product of ownership. It has everything to do with practice. You ignore the influences of ownership at your peril. Michael Sachs:  The term "buying physicians" sounds like indentured servitude, and I'm against slavery. I think if you approach it from that perspective, it's kind of a negative when you begin the conversation. I admire Larry [Goldberg] for not looking at physician profit and loss [statements]. I look at it from the patient experience [perspective]. You walk in, you need care — do you really check to see whether the physician is employed or independent? I don't really care what the organizational structure is. I think what we need to be doing is thinking about how to create the best patient experience. José Sánchez: I run a small 200-bed community hospital in Humboldt Park [a neighborhood on the West Side of Chicago]. When we talk about physicians, our strategy is totally different. We cannot afford to buy practices or even employ physicians. We have approximately 300-plus physicians in our hospital, and about 40 of those are employed. The others are voluntary. We have to be extremely cautious about the investment we make into any entity or practice, because we cannot afford to make a mistake. We have integrated a family practice training program with a federally qualified health center. We graduated our first class in June 2008 and were able to retain six of them. These are physicians who are mission-driven and want to work in poor communities. We try to bring them together to participate in quality, patient safety and all personnel discussions.   Catherine Jacobson: I spent 25 years in Chicago. I've been in the Milwaukee market for three years. You couldn't have two more different markets 90 miles apart. Chicago is still very fragmented, onesies-twosies, and Milwaukee is largely an employed model. Our organization is an academic medical center, but we're also community-based. I live between two worlds. Our community physicians were built out of private specialty practices. One of our challenges was how do we keep that ownership model underneath the health system, and physiciangoverned? We started right from the get-go [with] our metrics. Eight percent of their compensation is at risk for quality metrics, and we will take that even higher as we move our compensation models along. Joe Fifer: I'll give you two perspectives. On behalf of CFOs, they are, by and large, struggling [with] how to account for changing how you evaluate the physician employment model. They are nervous about it. From my perspective, one of the things that's not talked about enough in the cost of healthcare today is chronic conditions. That's where all the dollars seem to be, and it's an area where there's the greatest amount of practice variation. I don't know how you work around that and get financial incentives aligned without aligning practitioners and coordinating care more efficiently. I think it's a must to continue the physician employment trend to coordinate care better and take on new payment models. Dr. Diana Hendel:  I'm responsible for hospitals in south Los Angeles County. Interestingly, there are two states [California and Texas] where there's a ban on the corporate practice of medicine. We Phil Kambic: We're actually hiring. We're just finishing our budget for next year, and we're trying to [maintain] inpatient acute care by repositioning people and not replacing them as they transition out. We're shifting to an outpatient arena very quickly and repurposing our inpatient acutecare setting. Larry Goldberg: There's a few things. Good news, we've been underpaid for years, so we've had to manage our costs. We're in a favorable position for labor. In some areas, we were actually understaffed and had to staff up. There is a continued due diligence of investments we make, the physician employment model — we scrutinize all those positions. We are slowing hiring as well. Russell Sullivan:  [Editor's note: Mr. Sullivan helped craft the PPACA.] The goal in the development of the ACA really did focus on reduced costs and increased quality. The goals were to reduce costs to businesses, patients and government. Most major provisions are aimed at prodding hospitals and doctor groups to find ways we could reduce costs. They started from that framework. Quint Studer: You can't fall into the trap of thinking morale will go down because there's a staff reduction. It doesn't have to. You always have to bring it back to the values of the organization. [It's about] providing long-term community service, and you can't do that if it goes out of business. Then go into why you're [eliminating jobs] and answer the big questions. "Why are we laying off people when we're spending money on consultants, capital investments, advertising and employing doctors?" We have answers, but get those prepared and out early instead of letting [the questions] come to you. The other thing is, will this affect senior executives? Those who are leaving, what's happening to them? You really have to outline very quickly how you'll handle the people who are leaving in a value-driven way and then bring it back to the [organization's] values. Dr. Diana Hendel: We are mindful of redeployment and retraining as we become an integrated

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