As more and more physicians become employed by health systems and hospitals, concerns are raised regarding how the employers may manipulate physician behavior based on the master-servant nature of employment. In light of those concerns, the AMA has issued Principles for Physician Employment. The principles address conflicts of interest that can arise in employment relationships, contracting issues, the right to advocate, the separation of employment from the physician's status as a member of the organized medical staff, the need for peer review and approaches to performance evaluation, and transparency associate with payment by payors. The 26 individual principles provide a checklist for negotiations with potential employers, but they likely will not always be addressed in contracts. Moreover the principles offer some hope for independent physicians who seek to remain so but are worried that their referral base will erode as health systems require their employees to refer in network, so to speak. Those physicians who lose some of these referrals are often surprised to learn that the Stark regulations specifically permit the requirement of directed referrals under the personal services exception, the employment exception and the managed care exception. In other words, the policy antipathy toward self-referral in the physician world is not so honored in the health system and managed care world. We have long argued that the profound consolidation taking place right now is building powerful cartels often with no value proposition at all. We believe many of the hastily arranged transactions we have reviewed and advised on will not produce success for the employers or the employees.  We take the position that clinical integration and alignment to produce value do not require employment.

Clinical integration has increasingly been discussed as the vehicle to accomplish what is necessary to be accountable for care.  But even among those commentators who have gotten beyond the antitrust notions of clinical integration, few really describe the focus of change that can create a truly clinically integrated environment, nor how those changes can make a difference. For some time now, we have touted clinical integration as a way to reorganize clinical and administrative processes of care, particularly among physicians and the other clinicians who work with them, but also in relationship to hospitals. (See issues: #70, #67, #60) Now, Alice and Jim Reinertsen MD, have created a Clinical Integration Self Assessment tool which elucidates 17 distinct attributes of clinically integrated programs, whether within a physician group, by a hospital with its newly employed physicians, within the organized medical staff, or in a newly coalescing ACO-like entity.  All ought to take into account the range of issues identified, but in slightly different ways.  We are also explicitly calling for those who may use the tool, to revise, refine and add to it.

In her article in Medical Economics “Making Clinical Integration Work” Alice focuses on how clinical integration is meaningful to small physician practices.  In their brief piece for the Health Forum, “Clinical Integration: Getting From Here to There” Alice and Jim Reinertsen focus on the hospital-physician nexus of clinical integration.  Clinical integration of various kinds is going to be the sine qua non of health care delivery which will succeed in an environment of heightened quality expectations, the need for better patient safety, diminishing reimbursement, and pressure for contained costs.

The new environment makes it abundantly clear that physician engagement with hospitals will be essential to their ability to produce value.  At the same time, physicians themselves will have to find new ways to clinically integrate within their own groups.  Hospitals which have now moved significantly into the physician employment arena will have to figure out what to do with their physicians.  In their new paper, “Achieving Clinical Integration with Highly Engaged Physicians” Alice Gosfield and Jim Reinertsen elucidate the new basis for common cause, contrast the current environment with past clinical integration efforts, and offer a new definition of clinical integration

“Physicians working together, systematically, with or without other organizations and professionals, to improve their collective ability to deliver high quality, safe, and valued care to their patients and communities.”

We offer four vibrant examples of very different programs where self-motivated physicians have clinically integrated.  We reflect on the ways in which the organized medical staff can actually support and bolster clinical integration; and we introduce a new framework – the Four Fs – to help structure organized thinking about re-visioning the mission of the healthcare enterprise.  This paper is a significant resource to our new program of the same title for the Institute for Healthcare Improvement, “Achieving Clinical Integration with Highly Engaged Physicians”.  In the last analysis, this is an optimal moment for physicians to step up and take a leadership stance to improve care.

The requirements of the Joint Commission Medical Staff Standard 01.01.01 has created quite a furor in some corners. The standards focus on communication and adequate representation by the Medical Executive Committee of the voting members of the medical staff.  By giving medical staff members the ability to propose amendments to the bylaws directly to the Board of Directors, the Joint Commission has taken a stand with respect to those unfortunate circumstances where Medical Executive Committees and the members of the medical staff which they represent, find themselves in conflict.  Although many lawyers have overblown reactions to these changes, many hospitals and medical staffs are taking this moment of transition to think more explicitly about the role the organized medical staff can play in the new world order of measurement, transparency, value-based payment and clinical integration.  Because the medical staff has no reason to exist other than in its support to the Board by advising it on ensuring the quality of care in the hospital, the standards, the culture, and the processes by which this will be accomplished have new momentum.  The role of physicians in defining the quality culture image of a hospital cannot be overstated.  We are working with medical staffs around the country to revitalize their bylaws and their view of themselves.  Physicians can not be engaged with each other unless they meet with each other, so some organizations are changing their meeting requirements to a more traditional expectation that physicians appear at meetings. Of course, since time is the scarcest resource physicians have available, to get them to spend time working with the hospital, the work must be meaningful to them.  We have long taken the position that the best approach to engagement is to IHIEngagingPhysiciansWhitePaper2007. We think that the moment to revitalize the medical staff is even stronger than it has been.  We do not share the views of those who see the organized medical staff as obsolete.

As the concept of “Accountable Care Organizations” and moving to “The Clinic Model” have captured the fancies of a number of small and large hospital systems around the country, Alice with Jim Reinertsen, MD explores the real questions that should be asked and answered before health systems and physicians leap into these often ill-defined strategies. In their piece “Informed Consent to the Ties That Bind” , Alice and Jim describe specific points of evaluation, and offer good and bad answers to the tough questions. They raise issues that few of the consultants pushing these strategies are willing to address.

The organized medical staff has a unique role in assuring the quality of care in hospitals. Yet the volunteer medical staff members are under unprecedented pressures which inhibit their willingness to take on tasks they traditionally have performed for free – whether medical staff leadership, service on committees, or on-call and indigent care coverage. Now, there is some data showing that throughout the country, there is an emerging bifurcation into alternate models of medical staff-hospital relationships. (See, Casalino et al, “Hospital-Physician Relations: Two Tracks And The Decline of the Voluntary Medical Staff”, Health Affairs (Sept 2008). Where in the era of post-failed Clinton health reform, hospitals bought primary care practices and then had to unload them, more and more hospitals today are acquiring specialist practices and employing specialist physicians. Equally present are the settings in which members of the medical staff go into competition with the hospital and cease to attend there as much as they used to, while they own and develop ambulatory surgery centers, imaging facilities and even whole specialty hospitals. What is the significance of this for medical staff governance and quality surveillance? These changes in organizational arrangements really ought to have little meaning to the functioning of the organized medical staff in relationship to the hospital board and administration with regard to its principal responsibilities for quality. The medical staff members, whether employed or independent or more typically a mix, still have a unique role in the hospital.

Some commentators have taken the position that the organized medical staff is obsolete if not moribund. We believe they may be wrong; although it is becoming increasingly important to consider carefully just what the function of the medical staff ought to be in the highest quality environments. If 20% of the medical staff is responsible for 80% of the hospital admissions, then who should be considered Active Staff with governance authority to make the rules for the interrelationships among all physicians? Who should define the quality culture for physicians? If the hospital employs the physicians and mandates their participation in activities that fundamentally do not interest them, what will be the outcome for patients? If the medical executive committee is focused on internecine warfare, endovascular food-fights and not how many hearses leave the hospital and why, what will the hospital do without a medical staff on whom it can rely to create a high quality environment? We think these are essential questions which merit the attention of hospitals, their boards and medical staff members. We do not believe that employment of medical staff members ensures an engaged medical staff which will work well on quality issues. We think that the current moment in quality policy and demand for demonstrated hospital quality performance offers an unprecedented opportunity to reinvigorate the role of the medical staff around issues that really matter.

The challenge of engaging physicians in quality initiatives at the hospital often falls most heavily on the shoulders of the medical leadership in the C-suite, whether the chief medical officer or the VPMA or the chief of staff. In their article directed to these folks, “Finding Common Cause in Quality: Confronting The Physician Engagement Challenge”, Jim Reinertsen and Alice Gosfield dispute the metaphor offered by Jeff Goldsmith of the hospital-physician engagement continuum as a coral reef of predators and prey. From their continuing work with IHI and medical staffs and hospitals around the country, they continue to hold the firm belief that enormous strides can be made for better patient care and more activated physicians, when physicians are seen as the hospitals true partners and not mere customers.

Among the many strategies for closer alignment between hospitals and their physicians are the proliferating joint ventures and financially driven exercises, including gainsharing, that are intended to capture with more revenues the loyalty of the medical staff members who are involved. In an editorial in a recent issue of the Journal of Oncology, “Physician-Hospital Partnerships: What Really Counts?”, Alice argues that unless the quality implications of hospital-physician ventures are their driving purpose, these transactions may generate short-term revenues, but they will not feed the core needs of their participants. Still, they may have an important role within the context of a well-thought out physician engagement strategy.

The impetus for quality comes in many forms. Alice has co-authored an article with James L. Reinertsen, MD in the November/December 2005 issue of Health Affairs, "The 100,000 Lives Campaign: Crystallizing Standards of Care for Hospitals", which makes the case that IHI's 100,000 Lives Campaign has changed overnight the legal standard of care for hospitals throughout this country --- whether they enrolled in the campaign or not. We elucidate why. We speculate on the kinds of cases which failure to implement the six planks of the campaign will generate. We look at the top ten reasons hospitals get sued and place the planks in that context. Risk avoidance certainly adds to the business case for quality. And then we say why fear of malpractice liability is not the real reason to implement the six planks. Moral reasons and a call to the true mission of health care enterprises are the real motivations to prevent preventable deaths.

As health plans and health systems have consolidated and fraud and abuse enforcement has intensified throughout healthcare, the natural business tendencies in any other industry for business partners to find ways to benefit each other economically in win-win strategies has been stifled in health care. Anxiety over fraud and abuse and antitrust risks, has gotten in the way of hospitals and physicians on one hand and health plans and physicians on the other working together for their mutual economic benefit with the purpose of improving quality. In a new chapter in the Health Law Handbook, Alice makes the argument that until the three principal drivers of the care that patients receive in this country take common ownership of the quality mission and stop thinking of themselves as disparate, adversarial stakeholders, quality will never advance to the levels we would like. "In Common Cause for Quality" she articulates a perspective on how to consider a business case for quality, sets forth the quality demands on hospitals and health plans which cannot be met without full cooperation of physicians and debunks the myths that the law impedes collaboration which benefits any party economically. She then enumerates 10 specific strategies by which hospitals and health plans can advance the physician's business case for quality through activities with direct beneficial financial impact on those physicians. She also presents 6 additional strategies through which physicians can and will have to help hospitals to optimize their quality efforts.

In "Enhancing Oncology's Business Case: How the Hospital Can Help" she presents a crisper version of these arguments in terms of how oncologists can safely look to their hospitals to help them with their own quality demands.

Hospitals and physicians have tried to collaborate more effectively through bonding, purchasing, owning and managing. Virtually none of these initiatives has improved quality of care. In addition, the rise in economic credentialing, conflicts of interest policies and disclosure of ‘competing investments’ further entrenches the parties as disparate stakeholders. In her work with hospitals and physicians in common cause for quality, Alice Gosfield has focused on the negative effect of these initiatives. Frequently, overly conservative attorneys contribute to mythologies pertaining to the impact of Stark and the anti-kickback statute on these issues. In an article jointly written with Jim Reinertsen, M.D., for Hospitals & Health Networks Online, they debunk these myths and offer strategies for more collaborative, quality-enhancing relationships. The second part of the presentation describes how PROMETHEUS Payment® can further these relationships by supporting with a different payment system efforts that hospitals and physicians ought to be involved in any way.

As physicians have become more interested in receiving the full economic value of the work they produce, and they have sought increased control over their work environment, more and more often they have created and financed health care enterprises which may compete with the hospitals at which they have traditionally maintained medical staff privileges. Some hospitals have reacted with restrictive medical staff policies, intrusive inquiries into staff members’ financial relationships with other health care enterprises, controls over who may be a medical staff officer and a variety of other defensive behaviors. Some restrictions or threshold criteria for privileges reflect a real effort to safeguard quality in the hospital and are quite legitimate. Others really implicate the federal anti-kickback statute. The OIG has called for comments on how economic credentialing by hospitals may violate the anti-kickback statute. We are making available our comments to the OIG on these points.

Even as Joint Commission has expanded its attention on quality improvement activities in the hospital, hospitals that do not rely on “deemed status” based on their Joint Commission survey will have to meet the CMS conditions of participation which now require the hospital to develop, implement and maintain a data driven quality assessment and performance improvement program (42 CFR § 482.21) which must rely on quality indicator data. The Board itself is held accountable for the operation of the program. (42 CFR § 482.21(e)). This reemphasis should further propel hospital boards in stewarding the data driven quality improvement of their organizations.

Economic credentialing is only one of a number of sources of tension between medical staffs and the hospitals to which they relate, which tensions are growing as the dynamics of health care change. In many ways, it is not unreasonable to ask ‘what is the value of the organized medical staff?’ in the current hospital environment. In our AGG Note, "The Organized Medical Staff: Should Anyone Care Any More?" we present information regarding the genesis and legal basis for the medical staff, how bylaws relate to the new environment, typical bylaws contents and typical bylaws mindsets. We offer 7 principles of interaction to improve and make more meaningful for physicians and hospitals their interactions in the interests of patient care quality along with 5 suggestions regarding how to revitalize and make easier certain key medical staff functions. We also review 5 of the hot potatoes in medical staff-hospital relationships including economic credentialing, EMTALA obligations, and cross-department privileging, among others.  For a more extensive consideration of these issues see Alice Gosfield's article "Whither Medical Staffs?: Rethinking the Role of the Staff in the New Quality Era.".

For related information see our discussion of our monograph for the AMA "Quality and Clinical Culture" below, and our work on the AMA's model medical staff bylaws, below.

Alice Gosfield's monograph for the American Medical Association, "Quality and Clinical Culture: The Critical Role of Physicians in Accountable Health Care Organizations" (Go To Article) served as the basis for the ten point guidelines developed with the AMA and promulgated by the Blue Cross Blue Shield Association, ("Guidelines for the Role of Participating Physicians in Health Plans") as recommendations for its plan members in their relationships with physicians.