Healthcare Neutral ADR Blog

Does Healthcare Reform Require Hospital v. Physician Power Struggle?

     Writing in John Goodman's Health Policy Blog, Larry Wedekind suggests that real healthcare reform will require physicians, not hospitals, to acquire control of our healthcare delivery system. His entire post is worth the read, but it can be summarized as follows:

1. All of the pilot programs and demonstration projects tried by the federal government to date have been disappointing at best.

2. The traditional pattern of de facto hospital control of the delivery system is like letting the fox guard the henhouse. Since hospitals need to fill beds and expand outpatient volume, their efforts to acquire physicians' practices and develop integrated delivery systems should be seen as thinly veiled efforts to feather their own nests.

3. Physicians alone are capable of taking action to improve their patients' health. By putting physicians "in charge" of the delivery system, patient-centered care coordination can become a reality.

     Mr. Wedekind seems to assume that only one side can be "in charge" of the healthcare delivery system. What many hospitals now realize is that only by way of a jointly determined approach will most hospitals and many physicians survive.

     Hospitals cannot prosper in the long run by simply "paying for referrals" and relying on volume rather than measurably improving their patients' health. Physicians lack the skill, time, facilities and capital required to build the infrastructure that patient-centered care coordination will require. Each side has what the other needs to succeed.

     The trick will be how well and how quickly these parties are able to transform their historical relationships into a new and better way of doing business. Some hospitals and their medical staffs are well on their way, while others have yet to begin. All will encounter stumbling blocks along the way. In addition to the usual business issues that arise in any partnership or joint venture, the hospital-physician relationship is incredibly burdened by laws and regulations that preclude many arrangements that would be perfectly legal in any other industry.

     The key for hospitals and physicians will be to realize that both parties have a hand on the steering wheel, and that a failure to steer in the same direction will be disastrous. Essential to this process will be having a means to identify and resolve conflicts early and effectively. Governance by litigation is not an option.

[Image: Two pilots prepare to launch from the carrier USS Harry S. Truman in the Persian Gulf, December 26, 2004]

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