Culture, effect of - The Physician Culture and Resistance to Change, Part II

Hospital Culture vs. Physician Culture

This article originally appeared in the May 7, 2003 issue of Healthleaders News

Recently I heard Dick Davidson, head of the American Hospital Association, speak on "Fixing Our Broken Health System." He spoke of money pressures on hospitals. He asked for political support to bolster Medicare funding. Community health care, he said, converges at America's 5,000 hospitals. Hospitals are obligated to take all comers, their doors are open 24 hours a day, and meeting expenses of federal regulations is overwhelming many of them.

Davidson sees hospitals as the center of health care in most communities.

All care roads converge there – preventive care, health promotion services, high-tech care, oncology care, outpatient care, and increasingly, low-tech primary care delivered by hospital-employed physicians. The hospital culture sees itself as being everything to everybody – as a place of convergence and integration for hospitals and physicians.

Unfortunately, the hospital’s role as an indispensable community asset has become difficult. Medicare and Medicaid cuts, costs of the uninsured, and computer infrastructure demands are cracking hospital financial foundations and shredding the safety net for needy patients.

Meanwhile the physician culture – more fragmented, more introverted, and less hierarchical than the hospital culture – is experiencing its own angst, stemming from downward pressure on incomes, reduced reimbursements, sicker patients requiring more time, rising costs of doing business, unaffordable malpractice rates, HIPPA, and increased competition from physicians employed by hospitals.

Will hospital and physician cultures, both experiencing difficulties, converge into strategic partnerships?

Will they diverge into competing entities?

Will they integrate or disintegrate?

Hospitals hope for convergence and integration. Some health observers and stakeholders, including powerful specialty groups, foresee divergence and disintegration.

• Regina Herzlinger, Ph.D., professor at Harvard Business School, says "focused factories," specialized centers of excellence dealing one disease, will eventually replace hospitals that provide comprehensive care to all comers.

"I don't think we can develop one vertically integrated, relatively convenient system that provides care for every conceivable disease for every patient,” she says. “It's just not realistic."

• Jeff Goldsmith, futurist, has written:

"As health systems integrated structurally, they disintegrated culturally. The gap between professional and managerial cultures that existed during most of the 1980s and early 1990s widened into a chasm by the late 1990s. Professionals of all stripes – not merely physicians, but nurses, technicians, social workers and others – saw their practices increasingly commoditized and marginalized by the growing corporate ethos in their systems; professionals lost contact, physically and spiritually, with the 'adminisphere' – the tiny handful of people running their systems."

• Daniel K. Zismer, Ph.D., principal of a healthcare consulting firm in Minneapolis, says:

"More hospital CEOs will lose their jobs over physician relations than for any other single reason over the next several years. Organized groups of physicians in certain specialties that also happen to be critical to the success of hospitals have business strategy alternatives, which, if pursued, can have devastating consequences for hospitals, which in turn, threaten the jobs of health system CEOs."

• In Columbus, Ohio, Michael Curtin, Mount Carmel Health Systems board chairman, reacted to news that Columbus orthopedic surgeons were building a specialty hospital by saying,

"You cannot stand by and watch people rip out whatever profitable veins there are for a community facility." Mount Carmel and OhioHealth, another Columbus hospital system, plan to deny privileges to doctors investing in New Albany Surgical, an orthopedic hospital. Carl Bears, M.D, investor in the physician hospital, explains physician investors' rationale: "To gain control over how a hospital is run, you have to be an investor." And Robert E. Tabbies, M.D., an Oklahoma City neurosurgeon, part owner of the Oklahoma Spine Hospital, says: "For physicians, control and decision-making power translate into a more satisfying and rewarding professional life and increased revenues in the time of declining medical reimbursement, and many patients demand personalized treatment especially when it involves specialty care and surgery."

What can a hospital CEO do to influence physicians to become strategic partners, rather than competitors of hospitals?

Well, first, the CEO should understand the essence of the physician culture.

1. Physicians in a single specialty, though considered conservative and slow moving, speak from the same page. They know each other well, have similar practices, have a common language, and unite behind common business purposes. When uneasy or suspicious of hospital motives, they can move with astonishing speed to form competing entities.

2. Certain specialists, including heart surgeons, cardiologists, orthopedic surgeons, general surgeons, neurosurgeons, and oncologists – the economic lifeblood of most hospitals – are accustomed to acting decisively in clinical matters. This decisiveness carries over into business affairs.

3. Physicians are threatened by a hostile business climate and will move quickly to gain control of their economic and clinical destinies.

4. Physicians pride themselves on being independent professionals and are accustomed to acting with dispatch and with inadequate and uncertain information.

5. Physicians aren't impressed by business acumen. In their group opinion, physicians know hospitals, HMOs, management companies and large group practices have had their runs at owning, organizing and employing physicians, and for the most part, have failed to make a go of it.

6. Physicians understand the the physician culture, and its underlying cohesion, even as critics dismiss it as 600,000 fragmented doctors with 2,000 charts each.

7. Physicians are skeptical that hospital executives understand the physician business. After all, few hospital CEOs have yet to spend a day in the trenches with real doctors and real patients.

8. Physicians know their market power. They have yet to hear a sick patient say, "I feel ill. I must go to my Integrated Delivery System." Patients still go to their responsible neighborhood physician or appropriate specialist.

9. Physicians are a self-organizing swarm. They move in unison to a professional beat bred into them by self-selection and training. Physicians are self-learning Darwinians who know how to act, react, adapt and survive as individuals and as members of groups.

10. Physicians do not like to be told how they should be compensated. They prefer not to be paid salaries. They wish to be rewarded on a basis of individual productivity. Physicians make bad employees. Ask HMOs, hospitals, IDSs, PPMCs or other healthcare corporations. They have tried and failed to rein in that individualism or to put physicians on salary.

11. Physicians are a brotherhood and sisterhood. They come out of a common professional incubator, and know how each other thinks and acts without asking.

12. Physicians ask to be trusted to do the right thing, to be considered professionals, to be paid for productivity, and seek information systems that provide relevant information and speed patient flow.

13. Physicians prefer to run their businesses from the bottom-up, rather than having it imposed on them from the top-down by outsiders.
So, given the nature of the physician culture, what are hospital CEOs, whose job may be at risk, to do?

Here is Zismer's advice:

1. Don't delegate physician relations to lower management. Approach leaders of key physician groups yourself and say something to the effect of: "The hospital and I are interested in ensuring that we understand your needs and are innovative in our methods to the success of our collective futures over the long term."

2. Remember, your hospital's future depends on specialists in multispecialty or single specialty groups, not with "medical staff." Explain to your board the fundamental difference between specialty groups and the "medical staff." The medical staff is not a business entity. A specialty group is.

3. Give an honest report to the board about the state of the physician business climate – the good and the bad. Board members don't like surprises.

4. Understand market risks and financial consequences of a specialty group pulling out of the hospital and building its own facility. Report these risks and consequences to the board.

5. Engage in organized and deliberate business planning with key groups.

6. Be willing to execute on business models that make sense for both the hospital and physician groups, even if these models aren't an exact fit for the hospital culture, even if it entails business partnerships with physicians, even if they dilute the hospital bottom line in the short term. In the longer term, the new arrangement will most likely extend market share.

7. Be always mindful of the legal considerations in designing hospital/physician collaborations, including, but not limited to, Stark self-referral statutes, anti-statutes, tax-exemption standards, and reimbursement issues.
Always keep in mind that physicians resist change that subjugates them to hospitals. Remember, physicians will accept change if it gives them more influence and control over clinical affairs, and if it helps them retain their autonomy.

In Part III, we will look at physician leader success stories.