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Physicians in the Spotlight: 3 Predictions for Hospitals in 2019

It’s that time of year for reflections: what we’ve learned in 2018 and how to pay this knowledge forward as we navigate what could be another challenging time for American hospitals and health systems in 2019. In fact, a recent industry report from Fitch showed “declining operating margins across the hospitals rating spectrum.” Said another way: hospital margins are razor thin. And, when you combine that news with headlines of new market entrants — such as Amazon, Walmart, and ride sharing giants Uber and Lyft — all trying to get a piece of the “health care pie,” anxiety might start to set in for health care organizations. But, stop… and take a deep breath, because with every potential business threat comes opportunity. That’s why I’ve identified three predictions for the new year that hospitals, in particular, should stay laser focused on – especially if they’re looking to increase operating margins and keep physician teams happy.

Prediction #1 – Physician burnout will increase and health care teams must address it aggressively.

Physicians are dissatisfied and overworked. I know that’s NOT some kind of news flash, either. We’ve been hearing about this nagging issue for years and it’s only getting worse. In fact, in the last three years, physician burnout has jumped 54 percent , with no signs of slowing down. And, as health care continues to automate all things, physicians report burnout and stress with IT health care solutions, specifically. As a result, executive leaders must stay aggressive about what they are strategically taking OFF their physicians’ plates. The fact of the matter is, physicians are asked to see more and more patients (i.e., volume to make the compensation plan), master more IT “gizmos” as we digitize health care (faster and leaner operations), and remain active participants in business decisions daily for a health system (physician leaders are key players for optimal health care delivery.) Something has to give. And here’s how to do that in a smart way:

    • Make sure you know what is asked of every physician leader and if that layering of tasks is what is most optimal for both sides.
    • Dust off the compensation plan and your physician administration agreements. Evaluate if the time criteria and the focus designated for the medical directorship makes sense still today.
    • When purchasing IT applications, evaluate and ask the IT vendor if they’ve done their homework to make that new application easy for the physician audience (e.g., was it designed for a physician’s workflow in mind?). Fluid, easy training is mandatory, too.

Prediction #2 – ‘Total Physician Spend’ is the new financial management category.

If you’re not tracking it, you’re already behind. What is total physician spend and why do we care? In a nutshell, this is the amount of dollars spent on your physician partners. And, the way a health system can contract with a physician services today is dizzying in terms of options. This can include employment, medical directorships, on call or shift pay, research, graduate medical education, and co- management agreements. Usually these types of payments are warehoused in different parts of a health system, calculated on Excel spreadsheets, and executed in silos in terms of payment. If your health system CEO asks the team, “what is the cost of our physician economic alignment strategy,” that is a giant ask. And, typically, a black hole for any team to get their arms around given the options, types, and silos that still exist within a health system for physician pay. Given the slim margins, health systems need to account for all costs. Physician spend has been a protected bucket given that the C-suite usually drives strategic alignment and is largely executed in silos. Transparency is necessary to measure and manage the health system’s physician spend to make sure the dollars are with the right physician partner, valid compensation for work accomplished, and matched to the health systems strategic imperative. The health

Prediction #3 – Tracking physician administrative time will continue to be a thorn in the side of every hospital administrative team.

This is blind spot for all executive teams and tied to physician burnout. Hospitals are notorious for having paper processes that drive physician administrative pay, and then a long line of manual “checks and balances” for how long it takes to get a check out the door to a physician partner.

We conducted a hospital market survey in 2018 and found a couple of concerning trends in the way hospitals measure physician administrative time today:

    • 27 percent of hospitals still do not collect time logs for physician administrative work, which violates Federal laws.
    • Health systems are not measuring their physicians employed time and 42 percent do not require employed physicians to complete time logs for administrative work.
    • If a health system does get the paper time log process rolling, there are still major pockets for errors:
      21 percent reported illegible time logs; 71 percent reported issues with late submission; and another 21 percent deal regularly with the dreaded “rework” for clarification.

Poor processes around physician time tracking violates compliance and legal standards, doesn’t allow for crisp financial management, and creatively tortures your physician partner all in one fell swoop.

With all the challenges health care faces, hospital teams have to roll up their sleeves with their business processes that touch physicians. Processes that add more to an already burned out physician workforce must be identified and eliminated. Only then can you address those margin and physician satisfaction issues at their cores, and ensure you and your organization are on a better path.

Want to learn more about this topic? Check out the physician payment trends we identified in our research with HFMA.

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