PwC says doctors, hospitals must work together

As hospitals and doctors align their interests to take advantage of financial incentives offered under healthcare reform, the two groups, traditionally competitors, must learn to be collaborators.

That's the opinion of PricewaterhouseCoopers, a global professional services company headquartered in London. The second part of the “From Courtship to Marriage” series, released by PwC’s Health Research Institute, examines how hospitals and doctors view alignment and what they can do to become successful collaborators.

The first part of the series, examining how healthcare reform has been pushing doctors and hospitals together, was released last year.

“It’s a change and it’s a transitional time period for all parties,” said Warren Skea, a director of PwC’s Health Research Institute advisory team. “There has to be real transformation to compete in this new delivery model and new reimbursement models that we’re moving into. There shouldn’t be any compromise. They really need to be collaborators – partners – in order to be successful.”

[See also: Hospitals are bringing in physicians, but who’s benefiting?.]

The report, based on interviews with hospital executives and a survey of 1,000 doctors, found that the two groups are still wary of each other.

Eighty-three percent of doctors in the survey said they want to maintain or increase their income in return for hospital employment. A majority also want to be more involved in the governance of hospitals.

Hospital managers, however, say they won’t pay doctors more without physician productivity measures and quality incentives and only if doctors help reduce supply and infrastructure costs. Hospital administrators are also concerned that doctors won’t have enough time and don’t have the leadership or business skills to participate in hospital governance activities.

Skea said that for hospitals and doctors to work together and forge trust they would be best served by setting up a basic structure in which there is “fair market value compensation and clear governance that has both equitable and fair physician representation.” A co-management structure, for example, is “a great starting point,” he said. “It builds trust. It sets that governance. It gets physicians and hospitals working together, understanding each other’s issues, strategically pulling in the same direction.”

This base will allow the two former competitors to move forward into different models down the road. “It’s one of those start small and grow it” situations, he said.