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The Greeley Guide to
Physician Employment andContracting
William K. Cors, MD, MMM, FACPE, CMSL • Richard A. Sheff, MD, CMSL
The Greeley Guide to
Physician Employment andContracting
William K. Cors, MD, MMM, FACPE, CMSL Richard A. Sheff, MD, CMSL
The Greeley Guide to Physician Employment and Contracting is published by HCPro, Inc.
Copyright © 2010 HCPro, Inc.
All rights reserved. Printed in the United States of America. 5 4 3 2 1
ISBN: 978-1-60146-738-6
No part of this publication may be reproduced, in any form or by any means, without prior written consent of HCPro, Inc., or the Copyright Clearance Center (978/750-8400). Please notify us immediately if you have received an unauthorized copy.
HCPro, Inc., provides information resources for the healthcare industry. HCPro, Inc., is not affiliated in any way with The Joint Commission, which owns the JCAHO and Joint Com-mission trademarks.
Richard A. Sheff, MD, CMSL, AuthorWilliam K. Cors, MD, MMM, FACPE, CMSL, AuthorElizabeth Jones, Associate EditorErin Callahan, Associate PublisherMike Mirabello, Senior Graphic ArtistAmanda Donaldson, CopyeditorKarin Holmes, ProofreaderMatt Sharpe, Production SupervisorSusan Darbyshire, Art DirectorJean St. Pierre, Director of Operations
Advice given is general. Readers should consult professional counsel for specific legal, ethical, or clinical questions. Arrangements can be made for quantity discounts. For more information, contact:
HCPro, Inc.P.O. Box 1168Marblehead, MA 01945Telephone: 800/650-6787 or 781/639-1872Fax: 781/639-2982E-mail: [email protected]
Visit HCPro at its World Wide Web sites:www.hcpro.com and www.hcmarketplace.com
05/201021779
iiiThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
Figure List ..................................................................................... vii
About the Authors ........................................................................ ix
Introduction: Why Is Employing and Contracting with Physicians So Hard? ..............................................................xiii
Start by Changing Your Mind-Set ............................................................... xvi
The Power of the Pyramid ...........................................................................xix
Leadership Is the Key ..................................................................................xxi
Key Success Factor 1: Clearly Define Roles: Are You My Boss or My Partner? ................................................... 1
Finding the Middle Ground ...........................................................................3
Key Success Factor 2: Master Management Strategies: Finding the Right Balance Between Managing Tight and Managing Loose .................................................................... 11
Understand the Value of Managing Loose and Managing Tight .................. 13
Contents
iv The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
Contents
Key Success Factor 3: Balance the Scales: Which Is More Important, Individual Physician Success or Group Success? ......... 21
Which Came First, the Chicken or the Egg? .................................................23
Key Success Factor 4: Achieve Patient, Staff, and Physician Satisfaction Through an Employment Model ................ 25
Patient Satisfaction Challenges .....................................................................26
Nonphysician Staff Satisfaction Challenges .................................................. 27
Physician Satisfaction Challenges ................................................................. 28
Achieving the Patient-Physician-Hospital Partnership .................................. 32
Key Success Factor 5: Determine Who’s on the Bus and Who Isn’t ............................................................................... 43
Step 1: Recognize that Past Behavior Is the Best Predictor of Future Behavior ....................................................................................... 50
Step 2: Determine the Competencies that Your Organization Demands in a Physician Employee ............................................................................... 50
Step 3: Apply Credentialing Best Practices to the Application Process .......... 53
Step 4: Conduct Behavior-Based Interviews to Determine the Applicant’s Character, Communication Skills, and Ability to Collaborate ..................... 59
Step 5: Ensure a Good Cultural Fit .............................................................. 62
Key Success Factor 6: Set Clear Expectations: What Does It Mean to Be a Great Doctor? .................................. 67
Step 1: Articulate Your Organization’s Mission, Vision, Values, and Strategic Goals .......................................................................... 69
vThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
Contents
Step 2: Choose a Performance Framework ................................................... 71
Step 3: Articulate Expectations that Drive Performance ............................... 73
Key Success Factor 7: Establish the Right Compensation Plan .... 81
Three Steps to an Employed Physician Compensation Plan .......................... 81
Physicians Employed by Separate Subsidiary Corporations and Captive Professional Corporations ........................................................ 97
Key Success Factor 8: Make the Contract Worth More than the Paper It Is Written On ........................................ 101
Set Clear Expectations ............................................................................... 102
Assess Overarching Considerations ............................................................ 103
Define Specific Contract Terms .................................................................. 108
Key Success Factor 9: Measure Physician Performance: It’s Not What You Expect but What You Inspect that Gets Attention .................................................................... 123
Normative Data .........................................................................................125
Perception Data .......................................................................................... 130
Key Success Factor 10: Master the Art of Providing Feedback .................................................................... 135
Components of a Performance Appraisal System ........................................ 136
How to Conduct a One-On-One Performance Appraisal Interview ........... 138
What to Do During the One-On-One Interview ........................................ 140
vi The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
Contents
What to Avoid During the One-On-One Interview .................................... 141
Be a Coach ................................................................................................. 142
Key Success Factor 11: Manage Poor Performance: Do I Need to Get in Their Face on This One? ............................. 143
Step 1: Design the Intervention ................................................................... 146
Step 2: Plan and Practice the Intervention .................................................. 151
Step 3: Carry Out the Intervention ............................................................. 163
Key Success Factor 12: Know When to Mentor and When to Draw the Line: Terminating Physician Employment Agreements and Contracts ................................... 165
Put the Pyramid to Work ............................................................................ 166
Due Process Rights ..................................................................................... 169
Key Success Factor 13: Create a Vision and Achieve Buy-In ....... 171
Key Success Factor 14: Develop and Support Physician Leaders ....................................................................... 175
Select Strong Physician Leaders .................................................................. 177
Prime Potential Leaders for the Future ....................................................... 178
Develop a Leadership Curriculum .............................................................. 179
Plan for Succession ..................................................................................... 181
viiThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
Figure 1: The Power of the Pyramid .............................................................xx
Figure 5.1: The Power of the Pyramid: Appoint Excellent Physicians ...........44
Figure 5.2: SMART Decision Tree Framework ............................................. 65
Figure 5.3: SMART Decision Number Line ................................................. 66
Figure 6.1: The Power of the Pyramid: Set Expectations .............................. 68
Figure 6.2: Crosswalk Between the ACPE/Pyramid and The Joint Commission/ACGME Competency Frameworks ..........................72
Figure 6.3: Performance Expectations for Employed Physicians Using the ACGME/The Joint Commission Framework (Online only)
Figure 6.4: Service Excellence Contract ........................................................ 74
Figure 8.1: Physician Employment Agreement (Online only)
Figure 9.1: The Power of the Pyramid: Measure Performance Against Expectations ................................................................................. 124
Figure 10.1: The Power of the Pyramid: Provide Feedback ......................... 136
Figure 14.1: The Power of the Pyramid: Applying the Pyramid to Leaders ............................................................... 176
Figure 14.2: Required Curriculum for Medical Staff Leadership Certification ............................................................................. 180
Figure List
ixThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
Richard A. Sheff, MD, CMSL
Richard A. Sheff, MD, CMSL, is the chair and executive director of The Greeley
Company, a division of HCPro, Inc., in Marblehead, MA. He brings more than
25 years of healthcare management and leadership experience to his work with
physicians, hospitals, and healthcare systems across the country.
With his distinctive combination of medical, healthcare, and management acumen,
Sheff develops tailored solutions to the unique needs of physicians and hos pitals.
He consults, authors, and presents on a wide range of healthcare manage ment and
leadership issues, including governance, physician-hospital alignment, medical staff
leadership development, ED call, peer review, hospital performance improvement,
disruptive physician management, conflict resolution, physician em ployment and
contracting, healthcare systems, service line management, hospitalist program
optimization, patient safety and error reduction, credentialing, strategic planning,
regulatory compliance, and helping physicians rediscover the joy of medicine.
About the Authors
x The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
About the Authors
Prior to joining The Greeley Company, Sheff served as VPMA, president of an
independent practice association, medical director of a physician-hospital organi-
zation, president of a corporation that owned and operated physician practices,
and a group practice medical director. He has taught at Tufts University School of
Medicine and served as chair of the Massachusetts Academy of Family Practice
Research Committee.
Sheff is one of The Greeley Company’s leading national speakers and is the author
or coauthor of many HCPro/Greeley books, including:
• CorePrivilegesforPhysicians:APracticalApproachtoDevelopingand
ImplementingCriteria-BasedPrivileges, Fifth Edition (2010)
• TheTop40MedicalStaffPoliciesandProcedures, Fourth Edition (2010)
• EmergencyDepartmentOn-CallStrategies:SolutionsforPhysician-Hospital
Alignment, Second Edition (2009)
• TheGreeleyGuidetoNewMedicalStaffModels:SolutionsforChanging
Physician-HospitalRelations (2008)
Sheff is a graduate of the University of Pennsylvania School of Medicine and the
Brown University residency program in family medicine. He was an undergraduate
at Cornell University and recipient of the Keasbey Scholarship for the study of
politics and philosophy at Oxford University.
xiThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
About the Authors
William K. Cors, MD, MMM, FACPE, CMSL
William K. Cors, MD, MMM, FACPE, CMSL, is an experienced physician exec-
utive with a background that includes 15 years of clinical practice and more than
12 years of executive hospital/health system management.
Cors has extensive experience in all facets of medical staff affairs, operations, and
development. His primary area of expertise is working with physicians and hos-
pitals to implement strategic medical staff development planning. He also works
with hospitals and medical staffs to integrate new medical staff models to help
ensure both physician and hospital success.
Other areas of expertise include leading change; improving physician-hospital
relations; credentialing, privileging, and peer review; clinical resource manage -
ment; improvement of quality of care and patient safety; public accountability
prepared ness; and management of medical staff conflicts, change, and disruptive
behavior. In addition, he has broad experience in medical staff documentation
and regulatory accreditation.
Cors is a Fellow of the American College of Physician Executives (FACPE) and has
served on the ACPE board since April 2007. He is board-certified in neurology
and medical management. In addition, he has achieved recognition as a Certified
Medical Staff Leader (CMSL).
In addition to working with medical staffs, hospitals, and boards across the
country, Cors has authored numerous white papers and articles and coauthored
xii The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
About the Authors
the following HCPro/Greeley books: TheGreeleyGuidetoPhysicianEmployment
andContracting (2010), TheGreeleyGuidetoNewMedicalStaffModels:Solutions
forChangingPhysician-HospitalRelations (2008), and TheMedicalStaffLeader’s
PracticalGuide,Sixth Edition (2007).
Cors holds a bachelor’s degree from the College of the Holy Cross, an MD from
the University of Medicine and Dentistry of New Jersey, and a Master of Medical
Management (MMM) from Tulane University.
xiiiThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
RichardA.Sheff,MD,CMSL
I recently worked with a hospital that had quite the mountain to climb: The medi-
cal staff had just taken a vote of no confidence in senior management. As a con-
sultant, the first step for me was to listen to each party’s grievances to understand
what had brought them to this confrontational peak. The physicians shared with
me a long list of grievances against hospital administration that had been growing
for years. Most recently, several incidents led the employed physicians to feel that
they had been treated in a top-down, heavy-handed manner.
When I asked the senior management team about these alleged incidents, several
members replied, “The doctors are employees and shouldn’t be treated any differ-
ently than other employees.” I didn’t have to look much further to find out why this
medi cal staff had taken a vote of no confidence. Hospital management didn’t get it.
There is something about physicians that makes employing them unlike employing
most other hospital staff. If management treats physicians like all other employees,
bad things are bound to happen. Examples of how hospital management risks
treating physicians like other employees include:
Introduction: Why Is Employing and Contracting
with Physicians So Hard?
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xiv The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
• Management single-handedly selects and implements an electronic medical
record (EMR) rather than involving physicians in the decision to adopt an
EMR and in the selection and implementation processes
• Management forces physicians into a particular work flow for patient care
rather than developing that work flow collaboratively with physicians
• Management dictates how physicians can use continuing medical education
(CME) funds rather than allowing physicians to choose CME activities that fit
their learning styles and schedules
In the 1990s, many hospitals began employing physicians. At the time, it seemed
like an ideal strategy to align physician and organization interests and, in some
cases, to prepare for more disciplined managed care contracts, including capitation.
The majority of those hospitals soon discovered that they were not good at employ-
ing physicians. They bought profitable physician practices and then watched in
dismay as money began flying out the window. The rule of thumb became that if an
organization lost only $50,000–$75,000 per employed physician, it was doing well.
Hospital administrators thought that employing physicians would suddenly cause
physicians to eagerly align with hospital interests. After all, wasn’t it in the
physicians’ best interests for their employers to succeed? Sadly, employment was not
the magic bullet they were looking for. As capitation failed to become the dominant
form of reimbursement that many had predicted, the tide of red ink for employed-
physician practices rose, and so did conflict between organizations and their
employed physicians. The conflict became so heated that many hospitals divested
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xvThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
themselves of the practices they had paid handsomely to purchase only a few years
earlier. Most hospital administrators who lived through that experience swore
never to get back into the business of employing physicians.
Fast-forward to today, and many hospitals again find themselves drawn into em-
ploying physicians. The reasons are different this time: Many young physicians
shun private practice in favor of the steady pay and regular hours of employment,
and those who are in private practice are finding it harder to succeed thanks to
growing overhead and decreased reimbursement.
Regardless of the reasons for this shift, anyone with enough gray hair to remember
the experience of employing physicians in the 1990s knows that hospitals must do
it differently this time. They’ve learned to anticipate that physicians who were hard
drivers in private practice are at risk of slacking off once they become employees
if they aren’t offered the right incentives. They’ve become reasonably adept at
designing incentive compensation plans for physicians based on an “eat what
you kill” formula that holds physicians accountable for productivity.
If organizations are getting better at financially managing employed physician
practices (although not all are), then why does the field need another book on
physician employment and contracting? The answer is that making the numbers
work is only the beginning of sustained success with employing physicians. This
book is designed to help leaders responsible for managing physician practices go
beyond simply designing incentive compensation formulas. This book is designed to
help them truly understand what makes employing physicians different and how to
craft creative and more effective approaches to physician employment.
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xvi The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
Contracting with physicians isn’t much easier than employing them, at least if you
want the contracts and the relationships they memorialize to drive physician success,
organization success, and high-quality patient care. Paradoxically, the most common
reason organizations’ contracts with physicians are ineffective is the exact opposite
of why employing physicians is so difficult. Employing physicians is difficult be-
cause most organizations fail to treat physicians differently than other employees.
Contracting with physicians is difficult because most organizations fail to treat
physicians the same way they treat other contracted entities or individuals. Standard
business contracts clearly delineate:
• The duties of each party involved in the contract
• A means of determining to what extent the duties are fulfilled
• The consequences when these duties aren’t fulfilled
Most physician contracts typically include few, if any, well-designed performance
expectations beyond rudimentary requirements, such as showing up to work and
documenting time on the job. They also include weak (or nonexistent) mechanisms
for holding contracted physicians accountable for meeting performance expectations.
Start by Changing Your Mind-Set
This book is based on the key success factors that the authors have found to be
most effective for employing and contracting with physicians. The first four success
factors are based on a common insight: Some of the challenges that arise when
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xviiThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
employing and contracting with physicians are solvable problems, and some are
inherently unsolvable.
Examples of solvable problems include whether to hire a particular physician,
which EMR to purchase for your employed physician practices, and whether to fire
the office manager of a practice that is doing poorly. Each of these problems has an
answer that is either right or wrong.
But what if the problem you face is inherently unsolvable? Examples of unsolvable
problems related to employing and contracting with physicians are:
• Should the organization’s management approach to employing physicians come
from the top down, or should it enable the organization to empower or partner
with employed physicians?
• How detailed should performance expectations be?
• How strictly should the organization hold its contracted physicians accountable
for meeting performance expectations?
• Should the organization expect employed physicians to automatically support
its interests or to focus on their own interests?
At either end of each challenge are two options, which may be referred to as poles.
These poles have a continuum running between them. Let’s take the first challenge
mentioned above: Should management’s approach to employing physicians come
from the top down, or should it enable the organization to empower or partner
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xviii The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
with employed physicians? There is value in each of the poles, but focusing too
much on one to the neglect of the other will undermine your success when it comes
to employing or contracting with physicians. When an unsolvable problem involves
two poles, it is sometimes referred to as a polarity. When it involves three or more
poles (such as physician success, group success, and good patient care), it is referred
to as a multarity. Polarity ManagementTM has developed an approach to help us
better identify and manage such unsolvable problems. Barry Johnson, PhD, the
initial developer of Polarity Management, says that many of our most important
and difficult chal lenges are inherently unsolvable and that an unsolvable problem is
also inde struc tible. Whether your organization manages a polarity well or poorly, it
will still be around the next day to be managed. You can never get away from it.
Recog nizing that the solution to these types of problems requires organizations to
strike a dynamic, ever-moving balance between the two poles will make your
organization more effective at employing and contracting with physicians.
Albert Einstein once said, “No problem can be solved from the same level of
consciousness that created it.” Rather, you have to take a step back and view the
situation from a different perspective. To help you see employing and contracting in
a new way, the first four chapters will focus on key success factors that address the
unsolvable problems that lie at the core of why organizations flounder when
employing or contracting with physicians. The following are the four keys to
success that each organization must master:
1. Clearly define roles: Are you my boss or my partner?
2. Master management strategies: Finding the right balance between managing
tight and managing loose
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xixThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
3. Balance the scales: Which is more important, individual physician success or
group success?
4. Achieve patient, staff, and physician satisfaction through an employment model
The Power of the Pyramid
All companies and organizations want to draw the best performance out of in di-
viduals they employ or contract with. Once you’ve understood and implemented
the first four key success factors, employing and contracting with physicians
becomes a mere hill rather than a mountain. The Greeley Company, a division of
HCPro, Inc., in Marblehead, MA, has found that the Pyramid approach is the most
effective way to apply HR best practices to physician employment and contracting.
This approach, pioneered by the late Howard Kirz, MD, MBA, FACPE, former
medical director for Group Health Cooperative of Puget Sound,1 is applicable to
volunteer medical staffs, employed physicians, and physician partnerships. As you
can see from Figure 1, the Pyramid consists of layers, with each layer representing
an HR best practice.
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xx The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
Each layer is a step that organizations that employ or contract with physicians
should take to optimize physician performance. Each layer is composed of a
collection of best practices for carrying out that step. This model is designed as a
pyramid because the more time you spend on the base layers, the less time you will
have to spend on the upper layers. This will make sense as we build the Pyramid
layer by layer throughout the rest of the book by exploring the additional key
success factors:
1FIGURE The Power of the Pyramid
Appoint excellent physicians
Set, communicate, and achievebuy-in to expectations
Contract toreinforce expectations
Measure performanceagainst expectations
Provide periodic feedback
Manage poor performanceTake corrective action
Source: © The Greeley Company, a division of HCPro, Inc., in Marblehead, MA.
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xxiThe Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
5. Determine who is on the bus and who isn’t
6. Set clear expectations: What does it mean to be a great doctor?
7. Establish the right compensation plan
8. Make the contract worth more than the paper it is written on
9. Measure physician performance: It’s not what you expect but what you
inspect that gets attention
10. Master the art of providing feedback
11. Manage poor performance: Do I need to get in their face on this one?
12. Know when to mentor and when to draw the line: Terminating physician
employment agreements and contracts
Leadership Is the Key
All the key success factors already identified are better implemented in settings in
which physician leadership is effective and more difficult in settings in which
physician leadership is weak. That’s why the final two success factors focus on
leadership. The first is articulating and achieving buy-in to a vision of what the
organization and physicians are trying to accomplish together for healthcare in
your community. Making that vision a reality only comes with a struggle. That’s
why we’ve entitled this key to success:
Introduction: Why Is Employing and Contracting with Physicians So Hard?
xxii The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
13. Create a vision and achieve buy-in
The final key success factor is investing in physician leadership development and
succession planning. We’ve entitled this key to success:
14. Develop and support physician leaders
Organizations that implement all these key success factors will outperform those
that do not when it comes to employing and contracting with physicians. Let’s now
tackle each of the key success factors one at a time.
Reference
1. We were first introduced to a version of this Pyramid approach by Howard Kirz through the course he taught for the American College of Physician Executives entitled “Managing Physi-cian Performance in Organizations.” We’ve made some modifications to the model, but the fundamental principles are the same as those initially developed by Kirz.
1The Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
When it comes to employing physicians, organization and administrative leaders
must understand that being a physician’s boss does not automatically grant them
authority to tell that physician what to do. Try this some time and see how quickly
your employed physicians dig in their heels.
Clearly Define Roles: Are You My Boss or My Partner?1
key success factor
ED call conundrum
The private practice general surgeons at Hospital X were unsatisfied with the organi
zation’s emergency department (ED) call schedule. The surgeons made it clear that
they would not mind if the hospital hired new surgeons, as long as those surgeons took
the bulk of the ED call. This would have worked fine if the new surgeons were willing
to cover one night out of three. Unfortunately, the hospital couldn’t find any general
surgeons willing to take a job that required them to take call one night out of three—or
even four or five. Eventually, in an attempt to attract general surgery candidates, Hos
pital X re arranged its ED call schedule so that newcomers would only have to cover
one night in seven. As a result, it was able to hire several new general surgeons. Thus,
although the hospital was able to hire several new employed physicians, the employed
physicians were the ones to set the bar on ED call.
S A M P l e S C e n A R i o
Key Success Factor 1
2 The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
Organizations that employ or contract with hospitalists face similar challenges to
the one presented above. The organization starts by either establishing an exclusive
contract with a hospitalist group or directly employing hospitalists. Over time, the
hospitalists develop favorites among the consultants on the medical staff. These
favorites may offer more timely responses, a stronger collegial relationship, or pro
vide higherquality care. As the program grows (and they almost always do), the
hospitalists direct more referrals to their few favorite consultants. Physicians who
aren’t in the group of hospitalist favorites may perceive that the organization is
behind the drop in referrals and eventually confront the CEO, demanding that he
or she require the hospitalists to distribute referrals to specialists on a rotating
basis. Surprised and appropriately concerned, the CEO meets with the hospitalist
program medical director with what he or she feels is a reasonable and politically
sensitive request that the hospitalists distribute their referrals more evenly among
ED call conundrum (cont.)
The fallout from this situation was predictable. The private practice surgeons com
plained bitterly that they had trouble maintaining their incomes because hospital
management had recruited so many surgeons that it diluted the pool of available
patients. In addition, these wellestablished physicians witnessed the hospital sub
sidizing the income of all the newly hired surgeons at a level they could no longer
achieve, and they became resentful. What began as Hospital X’s effort to alleviate the
independent surgeon’s ED call burden ended with the surgeons feeling betrayed.
S A M P l e S C e n A R i o
Clearly Define Roles: Are You My Boss or My Partner?
3The Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
the specialists. The medical director may respond by accusing the CEO of telling
hospitalists how to practice and refusing to cooperate.
The above example regarding ED call demonstrates that what the organization
thinks it can expect from employed physicians must be tempered by the competi
tiveness of the market. The second example regarding hospitalists demonstrates
how strongly physicians feel about the organization’s attempts to infringe on the
clinical decisions they make during the course of practicing medicine.
Finding the Middle Ground
What is an organization’s leader to do in the face of these challenges? As mentioned
in the introduction to this book, the key is to frame such challenges as unsolvable
problems, with each problem consisting of two or more poles. In terms of physician
employment, on one end of the spectrum is the economic and legal reality that the
organization, by virtue of employing a physician, is technically the physician’s boss
and therefore has the right to expect him or her to comply with organizational
policies, adhere to ethical billing practices, submit requests for vacation time in ad
vance, and take ED call one night out of three. These are standard account abilities
one would expect to see in any relationship between an employer and employee.
There is a value to this hierarchical relationship. It allows the organization to
manage the practice to achieve specific strategic goals, including highquality pa
tient care, financial strength, regulatory compliance, and patient satisfaction.
However, as with any polarity, focusing too much on the hierarchy pole and
Key Success Factor 1
4 The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
attempting to micromanage what physicians do may cause physicians to feel
controlled and dig in their heels, causing nothing but drama for administration.
On the other end of the spectrum is partnership, whereby the relationship between
the organization and the physician is one of equality. At this end of the spectrum,
physicians expect to remain autonomous regarding patient care decisions (more
on this in Key Success Factor 2) and the ED call schedule. When the organization’s
management and physicians engage in a true partnership, management treats physi
cians as equals in regard to decisions involving staffing, scheduling, and equipment.
But this end of the spectrum is no utopia. If administration does not set the dir
ection of the organization and establish strategic goals, physicians may make deci
sions that drive up practice costs, create excessive burdens on nonphysician staff
members, and reduce patients’ access to care. They may also refuse to provide ED
call unless the organization compensates them handsomely.
Organizations that fail to establish a balance between hierarchy and partnership
may inflame conflicts between management and employed physicians and lead the
medical staff to take a vote of no confidence in management, as illustrated in the
introduction. Why? Because management may become frustrated if the organiza
tion’s employedphysician practices lose money, if employed physicians fail to
support the organization’s strategic goals, or if it feels that employed physicians’
decisions are disloyal to the organization. Physicians may perceive that management
is insensitive at best and invasive and controlling at worst. They may dig in their
heels, feeling that they are fighting to maintain their autonomy.
Clearly Define Roles: Are You My Boss or My Partner?
5The Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
The problem is that when a physician and an organization are arguing over whether
the CEO is the physician’s boss with the authority to control the physician’s practice,
each party only sees its own side of the argument. Physicians may feel a range of
emotions including resentment, anger, and fear if they perceive that the organiza
tion is trying to take away the autonomy they believe is rightfully theirs by virtue of
being physicians. They believe this autonomy should not be sacrificed just because
they receive a paycheck from the organization. At the same time, organizational
leaders expect loyalty and compliance from employed physicians every bit as much
as they do from other employees and may feel angry if it is not forthcoming.
If you find yourself in this kind of tugofwar, the best practice approach is to
reframe the issue at hand as one that needs an appropriate balance between
hierarchy and partnership. In his book The Dynamics of Conflict Resolution,1
Bernard Mayer explains reframing in the following way:
Framing refers to the way a conflict is described or a proposal is worded;
reframing is the process of changing the way a thought is presented so that it
maintains its fundamental meaning but is more likely to support resolution
efforts. … The art of reframing is to maintain the conflict in all its richness but
to help people look at it in a more open-minded and hopeful way.1
By reframing the specific conflict as the challenge of striking the right balance
between hierarchy and partnership, both sides are more able to find common
ground (see the sample scenario at the end of this chapter to learn more about
reframing). If management clearly communicates to physicians that they are valued
Key Success Factor 1
6 The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
partners and treats them as equals rather than subordinates, physicians are more
likely to accept the conditions, limitations, and topdown guidance inherent in any
employeremployee relationship.
The hierarchy/partner framework is also helpful when contracting with physicians
and/or physician groups. As noted in the introduction, contracted physicians are
often not treated like others with whom the organization contracts, such as ven
dors. For example, many organizations draft contracts with physician groups that
simply provide exclusivity to the group and fail to address performance expecta
tions (performance expectations will be addressed in Key Success Factor 6).
For the purposes of this chapter, it is enough to recognize that one of the best
practices when contracting with, for example, an anesthesia group is to seek a
partnership between the organization and the group that drives the success of both
the operating room and labor and delivery. The terms of the contract should be
designed to reflect the giveandtake of this partnership. (We will address important
elements of contracting with employed and contracted physicians in Key Success
Factor 7.)
Clearly Define Roles: Are You My Boss or My Partner?
7The Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
Reframing a classic debate between hospitals and group practices
Hospital X employed six physicians in a family medicine group practice. The manager
of the practice was under pressure from senior hospital management because the
practice was losing money at the rate of $60,000 per year per physician. Some patient
surveys suggested that the group was losing market share because it did not offer
evening hours. In an attempt to grow market share and improve the practice’s financial
perfor mance, the manager asked the physicians to provide evening office hours. The
physi cians refused because they wanted to spend their evenings with their families.
Hospital management grew angry and impatient and reminded the physicians that the
hospital subsidized the group $360,000 more income per year than the practice would
have generated on its own, and that the least they could do to be loyal to the hospital
was provide evening office hours. The word “loyalty” created even greater animosity
among the physicians, who felt that their primary loyalties were to their patients, their
families, and their profession. Loyalty to the hospital was not on their radar screen.
Tension grew between the physicians and hospital management until the medical
director of the employed physician group offered to have a private meeting with just
the physicians.
During that meeting, the medical director reframed the issue. Rather than seeing it as
the hospital’s effort to control the physicians, he asked what it would take for the
physicians to partner with the hospital to provide the evening office hours. As they
discussed the issue, one of the physicians pointed out that a fulltime office schedule
was nine halfday sessions per week. If one day per week each physician worked a
morning, afternoon, and evening session, they could all fulfill their nine halfday session
and have a full day off each week. This suggestion appealed to the physicians’ interest
in having more time with their families.
S A M P l e S C e n A R i o
Key Success Factor 1
8 The Greeley Guide to Physician Employment and Contracting© 2010 HCPro, Inc.
Reframing a classic debate between hospitals and group practices (cont.)
They then tackled the issue of the call schedule. If Dr. Jones works the morning, afternoon,
and evening shifts on the same day he is on call, the office staff could offer patients who
called during the afternoon and evening urgent care slots the same day, reducing the
number of phone calls the physician on call had to handle while simultaneously improving
patient satisfaction. As the plan took shape, the physicians became excited about getting
a full day off each week and didn’t mind providing one evening a week in the office to
make that possible. To them, it seemed like a fair trade.
The medical director presented the physicians’ proposed arrangement to hospital
management. At first, several senior hospital managers felt that it might be unfair to
offer a fulltime employee a salary equivalent to what independent physicians earn
given how much time off the new schedule provided them. Hospital management
worried that private practicing physicians on the medical staff and other hospital
employees would think that the hospital was pampering the family physicians and not
holding them to the same standards as the rest of the physicians in the community who
worked longer hours.
Although there was some truth to these concerns, in the end, the hospital realized that
the physicians had shifted their approach from adversaries with their boss to partners in
joint problem solving. The benefits of the proposed solution had enough winwin
elements to overcome management’s concerns.
After the organization implemented the new schedule, patient volume grew, the loss
of revenue per physician shrank (although not to zero), and physician satisfaction im
proved. In fact, the onedayoffperweek arrangement became an attractive schedule
that helped the practice recruit three additional physicians. With the extra physicians,
S A M P l e S C e n A R i o
Clearly Define Roles: Are You My Boss or My Partner?
9The Greeley Guide to Physician Employment and Contracting © 2010 HCPro, Inc.
Reference
1. Bernard Mayer, The Dynamics of Conflict Resolution: A Practitioner’s Guide (San Francisco: JosseyBass, Inc., Publishers, 2000).
Reframing a classic debate between hospitals and group practices (cont.)
it opened a satellite office in a community on the edge of the hospital’s traditional service
area, helping the hospital expand its primary market. The key to all these achieve ments
was the group’s and hospital’s ability to reframe the problem in a way that allowed them
to achieve a balance between the hierarchical employment rela tionship and the partner
relationship. Most of the physicians never became model loyal employees, but they found
that being treated as partners helped them accept the necessary hierarchical aspects of
having a boss.
S A M P l e S C e n A R i o
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