Tuesday, July 24, 2007

Hospitals and Doctors - Co-opetition and Collisions Between Hospital and Doctors

Ever since I served as chairman of a PHO and co-founder of the National Association of Physician Hospital Organization (PHO) in the early 1990s, I’ve been hearing about “co-opetition” between hospitals and doctors. “Co-opetition” is a neologism combining “cooperation” and “competition.”

The management literature says “co-opetition” is good for everyone, and in some magical way, leads to “collaboration.” I wonder is this is true for PHOs, for which you often heard two phrases. “If you’ve seen one PHO, you’ve seen one PHO.” “Big H, small P.” PHOs, in other words, vary enormously in structure, and hospitals generally control PHOs in the end. PHOs depend heavily on leadership on both sides of the hospital-physician divide. But because trust may be lacking and because payers prefer to deal with hospitals and doctors separately, PHOs too often are ineffective.

There is another divisive factor, as well. Hospitals depend heavily on high margin procedural services – as performed by orthopedic surgeons, cardiovascular specialists, neurosurgeons, gastroenterologists, oncologists, and radiologists. These specialists’ procedures may account for 80% to 90% of hospital bottom-lines. In their own practices, doctors depend on these same high margin specialty services.

There is, in the real world, intense competition hospitals and doctors for income of high end ancillary services. When competitive push comes to competitive shove, there may be little middle or high ground, as evidenced by hospitals determined and successful political campaign to impose a moratorium on specialty hospitals.

Everybody, of course has their pet model to solve these problems;

•form a completely integrated health system with health plan, doctors, and hospitals under one corporate umbrella (The Kaiser Model);

•let doctors own and refer to specialty hospitals for more efficiencies, better clinical control, and more revenues (The Specialty Hospital Model);

•Have entrepreneurial doctors organize large multispecialty clinics that specialize in providing high technology care and high margin services (The Cleveland Clinic Model);

•organize integrated systems under physician leadership with hospitals or clinics at their core (The Mayo Model);

•create partnerships between hospitals and doctors and build “big boxes” or big MACCs (multispecialty ambulatory care centers) in which hospitals and doctors have equal stakes (The Collaborative Partnership Model);

•if all else fails, turn it over to the government (The Single Payer Model).

Just a couple of observations, if I may.

•Hospital-physician relationships are the most complex organizational problem ever created by humankind. Relationships are emotional and personal; issues may involve life and death matters; interdependent hospitals and physicians together consume 75% of health care dollars, so political and community stakes are enormous and often contentious.

•Hospitals can’t run their enterprise with doctors, and they can’t run them without them. Managing professionals with their own agendas, often dictated by the autonomous physician culture and hierarchical hospital cultures, sets up cultural turf battles, which may not be for the “good” of society, the efficiency or effectiveness of the system, or the safety and convenience of the patient.

•Encounters between hospitals and doctors, often conflicting, have many intersection points. James Hawkins, a former hospital CEO, and I discussed these encounter points in our 2006 book, addressed to hospital CEOs, Sailing the Seven “Cs” of Hospital-Physician Relationships: Competence, Convenience, Clarity, Continuity, Competition, Control, and Cash (Physician Support Resources, Inc, PSR Publications www.practicesupport.com). Managing these encounters requires human understandings of a high order of each other’s cultures

I’ve been asked “What is your agenda?” A big part of my agenda is to suggest and describe innovative hospital-physician relationships that improve health care, render it more convenient, enhance its safety and effectiveness, and make it less costly. I would be happy to deliver this message before audiences receptive to my message.

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