Physician/Hospital Alignment Part 2: Moving From Transactional Integration to Transformational Integration

Monday, December 30, 2019 | Joel Sauer, EVP, Consulting & Terri McDonald, VP, Consulting

In Physician/Hospital Alignment Part 1: Alignment Still Eludes Many Integrated Programs, we discussed how despite the fact that more than 80 percent of cardiovascular physicians are integrated with a hospital or health system, alignment remains a top concern for healthcare executives. In this post, we will delve into solutions for bridging the gap to set you and your organization on the right path.

Alignment is linking the disparate goals that reside in the governance silos we have created, moving from transactional integration to transformational integration. This requires hard work and collaboration. Achieving true collaboration takes time to develop and requires trusted relationships between leaders – transforming the “you” and “they” to “we and us,” or simply “the CVSL.”

Below are some ways to move toward transformational integration.

Develop a clearly articulated vision

The first step in moving toward integration with alignment for the CVSL is a clearly articulated vision. The CVSL vision establishes the roadmap for where the entire program wants to go and provides the framework for all strategic decision making. For this reason, it cannot be developed in a vacuum. Key stakeholders and representatives from across clinical and administrative teams should collaborate to develop the CVSL vision. Ideally, it will answer the question “where do we want to be in 3 – 5 years?” It should be an aspirational, yet realistic preview of the CVSL in the future; simply stated: memorable and meaningful to every level of the organization.

Establish an effective governance structure

Once the vision is developed, putting in place an effective governance structure is equally important to assuring sustained alignment and a high performing CVSL. Without the foundation of a functioning leadership and governance structure, the vision will languish for lack of execution. To create effectiveness, CV physicians must have meaningful leadership roles in strategic planning and decision-making from the executive level down through frontline committees and work groups.

A dyad leadership model is best practice for healthcare, pairing physician leaders with system, practice and hospital operational administrators. MedAxiom believes so strongly in this structure that it has embedded it within its own organization. The dyad model allows service line leaders to act more nimbly, with a timely approach to operationalizing and managing strategic priorities. When supported, subspecialty dyad-led councils promote and support collaborative work throughout the service line. An executive council of the CVSL, ideally composed of the subspecialty council physician leaders and senior administrative leaders, may act effectively in the governance of the CVSL (see Figure 1).

Figure 1

Example: CVSL Governance and Leadership Model



The CVSL governance structure brings all the individual providers and the operational functions into the dyad-led model, typically as a part of the subspecialty councils where the “heavy lifting” occurs to flesh out burning priorities, develop a plan and implement strategic tactics to improve.

Recognize the team vs. the individual

Based on surveys and our own consulting experiences, CVSL leaders across the country are overwhelmed by change and competing priorities. This state is only exacerbated in the absence of a common vision and effective governance structure, both to make decisions and then to get things done.  These can lead to frustration and even a sense of hopelessness in the pursuit of high quality, patient-centric care.

We often hear “the squeaky wheel” dominates in driving priorities. With a clearly articulated vision for the CVSL, dyad-led teams are better able to prioritize short- and long-term priorities and establish common goals to eliminate this dysfunction, manage change and support the care team. With this alignment the team is recognized over the individual and “the squeaky wheels” can be channeled into productive dialogue.  

Align priorities and goals

Getting priorities aligned across the CVSL is the next foundational step toward transformative alignment. When we work with groups in a predominantly production-based compensation model it is not unusual to hear someone describe the culture as “a group of individuals sharing overhead”. This is a quick tell about the level of alignment, and often it reflects a culture where partners are competing against each other. This type of isolation is certainly not limited to physicians. An improper organizational structure may allow or even encourage entire departments within the practice or hospital to isolate from the whole, competing for FTEs or capital. In this culture it is essentially impossible to work toward common goals.

Objective, measurable goals that are consistent with best practice should be set through the governance structure, and all goals should be aligned with achieving the CVSL vision. Sources for goals set at the subspecialty council level may include metrics from the cardiac and cardiac surgery registries, Centers for Medicare and Medicaid Services value-based purchasing programs, and operational metrics that support best practice. The executive council should provide oversight of each council’s performance and progress toward goals, establishing strategic tactics and a program-level balanced scorecard approach to measuring performance across the integrated CVSL.

This structure supports a framework to transition to purposeful standardization in operations and clinical work. It also creates the catalyst for recognizing the team over the individual and prepares the team to be highly engaged in achieving its goals.

Aligning compensation with vision

Only after the vision is established, along with the strategic tactics that will promote it, should provider compensation be tackled. All too often the compensation plan is put in place before strategy, only to discover that it creates significant barriers to moving the organization toward its goals. For instance, an objective might be to move more to a team-based care delivery model, yet current physician compensation is 100 percent derived from individual production. Thus, ceding work to a team may be resisted because of potential negative impacts to income. As leaders, we need to consider such behavior not as abhorrent, but as both logical and appropriate – simply a matter of responding to incentives. 

While it may seem like a straightforward process to create appropriate economic alignment, history has proven that the journey is quite complex and takes significant time and effort. There are legal, fair market, internal cultural and myriad other dynamics that must be considered. Additionally, there are always unintended consequences of nearly every remuneration system, so devoting ample time to the process is critical. The process will be helped tremendously if the leadership and governance structure, as noted above, has been carefully and thoughtfully constructed.

Just a few critical things to consider when approaching provider compensation: organizational mission and strategic objectives; quality, outcomes and service; advanced practice professional (APP) utilization and deployment; team relative to individual; and participation in alternative payment models (i.e.,“risk”).

Transformation through alignment

If alignment is eluding your program, take an inventory of the foundational attributes we’ve described above. Each attribute relies on the successful implementation of the one preceding it. Keep in mind the work starts with a unified vision and then a functional leadership structure, which inherently requires trust. Don’t skip these steps; they’re just too important.

The level of transformation your program will achieve is directly related to the amount of effort the team puts into it. And trust us . . . this takes a lot of intentional hard work! The good news is that all this sweat equity is worth it, both for your program and, more importantly, for your patients. We’ll be cheering you on and are always here if you need us!

Be on the lookout for resources on cardiovascular physician/hospital alignment models coming in 2020.

Learn more about the MedAxiom Consulting Team and how we can help you and your organization tackle issues such as physician/hospital alignment models and strategies, staffing/operational efficiencies, APP utilization and more.


Illustration: Lee Sauer

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