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Originally published in Modern Healthcare, September 28, 2010

A Luxury We Can No Longer Afford

Emily Friedman
by Emily Friedman

I was speaking at a state medical association meeting, and some of the physicians in the room were angry. One irate man asked, "Hospitals can own physicians; why can't physicians own hospitals?" He was referring to the provision in the Patient Protection and Affordable Care Act (PPACA, the 2010 health care reform law) that prohibits physician-owned hospitals from receiving Medicare or Medicaid reimbursement if they do not have certification from those programs by December 31 of this year (although, at most such hospitals, Medicaid patients aren't welcome, anyway).

I replied that there are instances where physicians do own hospitals — not only the more than 200 facilities currently owned by doctors, but also the Mayo Clinic, which owns Methodist and St. Mary's, and other integrated group-practice-based systems. He was not mollified.

His anger wasn't really directed at the new law; rather, it was aimed at non-physician executives of hospitals and health systems (although some physician executives have been the targets of similar wrath).

Some weeks later, a colleague who works at an academic medical center was venting his frustrations about the center's efforts to enhance its health information technology (HIT) system and to get the medical staff on board in terms of e-prescribing, other HIT initiatives, quality measurement and improvement, and more efficient policies and procedures. "The docs just don't want to change," he lamented. "They say things like, 'I've always run this department this way, and I always will.' It drives me crazy."

There are many enmities in health care, including those between physicians and nurses and between nurses and physician assistants, which in both cases are rooted in gender and turf issues. But another powerful tension is the visceral dislike, in many hospitals and health systems, between physicians and executives. Often, it's palpable; any visitor can sense it. They don't trust each other; each group thinks the other is greedy; each group thinks the other wants to disempower it.

There is evidence to support both views. Five years ago, a major medical center tried to implement a computerized physician order entry (CPOE) system without sufficiently involving the medical staff; they balked and refused to use it, and $30 million went down the drain. The standard-bearers of the then-incipient HIT movement said that this was because the system was clunky and hard to use (as if some of the stuff we are forced to live with today is any better).

But that was only part of it. This was also another example of administration-medical staff head-butting. During the same period, other hospitals and systems were able to implement similar programs without a war breaking out.

Even earlier, in the 1990s, hospitals that purchased medical practices learned some hard lessons, including the fact that they often paid too much, that physician productivity declined sharply once the practice was acquired, and that physicians take a dim view of being treated like low-echelon employees. Trying to disempower physicians is never a good idea, tempting though the idea is to frustrated administrators. And it can come back and bite you in the behind; I know of several situations in which a disgruntled medical staff got the CEO fired.

This longstanding tradition of distrust and hostility offers endless openings for jokes, anecdotes, and I-told-you-so post-apocalyptic analysis. But this perpetual clan war is a luxury we can no longer afford.

Why? Because most of the forces that are reshaping health care require that physicians and hospital and system leaders work together much more closely. The HIT provisions in the American Recovery and Reinvestment Act (ARRA, the economic stimulus legislation of 2009) offer many carrots in the form of subsidies to get physicians and institutional providers to adopt integrated electronic systems and e-prescribing. But in a very short time, those carrots will turn into sticks, in the form of payment penalties if providers don't get with the program.

Furthermore, there is an enormous need for better relations because many more physicians are seeking salaried employment. The average medical student graduated in 2009 with a debt of $156,456, according to the Association of American Medical Colleges; that's hardly an incentive for sinking half a million dollars into starting a new practice. More and more new physicians are women, who prefer salaried settings. Few primary care physicians make enough money to sustain independent practices. Last year, attorney Thomas Dutton predicted that "within the next 10 years, 85% of all physicians will be employed by a hospital."

Let's hope it goes more peaceably than it did last time.

And if physicians and administrators can make nice, the opportunities are many. Between ARRA and PPACA, there's a lot of money for integrated efforts. It's not just HIT; it's quality improvement initiatives, including reporting of outcomes and rewards for good ones. It's accountable care organizations (ACOs) taking responsibility for improving the care and health status of defined populations — and sharing in the savings. It's comparative effectiveness research, which will require extensive retooling of clinical systems, and, in some cases, retraining of physicians and administrators alike. It all points to one thing: Learn how to get along, in order to achieve what needs to be done. Rodney King was right.

Let's lay down our arms. Even the Hundred Years' War eventually ended. There are many other areas where our time and energy would be better spent.

Emily Friedman is an independent health policy and ethics analyst based in Chicago and an occasional contributor to Modern Healthcare's editorial page.

First published in Modern Healthcare, September 28, 2010

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