Nine in 10 Doctors Want More Say in Hospital Management, Finds PwC Survey

NEW YORK, April 20, 2011 /PRNewswire/ -- More than 90 percent of doctors in a recent nationwide survey by PwC US believe that physicians employed by hospitals should be more involved in executive leadership and management of the hospital, including serving on the board of directors and outlining performance improvement initiatives, according to From courtship to marriage Part II, a new report released today by PwC's Health Research Institute (HRI).

(Logo: http://photos.prnewswire.com/prnh/20100917/NY66894LOGO )

Healthcare is moving toward a new approach in payment that rewards doctors and hospitals for quality results over volume, and the shift is driving the two closer together.  Hospitals must rely on physicians to help them achieve health reform goals, and in return, physicians want not just financial security but also a say in hospital leadership. The prospects for a long-term union between hospitals and physicians will depend on their ability to meet in the middle, says PwC.

PwC's report is based on a nationwide survey of more than 1,000 physicians, supplemented by in-depth interviews with hospital executives, about their expectations as partners sharing power, resources and outcomes in a post-health reform world. HRI's research focused on what PwC says are three secrets for a successful marriage of hospitals and physicians: Shared governance, aligned compensation and changing physician-practice patterns.  

Hospital employment means physicians may have to give up control of how they practice to comply with standards that emphasize overall system quality and efficiency goals.  The trade-off, in their minds, comes with certain caveats. PwC's survey of physicians found the following:

• More than eight in 10 physicians (83 percent) who are considering hospital employment said they would expect to be paid the same as or more than they are now, with increases ranging from 1 percent to 4.7 percent or an average increase of 2.4 percent. Forty-five percent of physicians said they would expect an increase in pay and 38 percent would expect no change.
• Realizing the health system is changing to track and reward performance, most physicians agree that half their salary should be fixed and the other half should be based on meeting a combination of productivity, quality, patient satisfaction and cost of care goals, with upside earning potential for performance.  
• Expectations for compensation varied by physician specialty, with pediatrics, psychiatry and cardiology expecting the largest increase and general surgery, oncology, and emergency medicine expecting the least.
• Six in 10 physicians (62 percent) believe that nationally accepted physician practice guidelines should be used to guide the way they practice medicine, while one in three (30 percent) prefers locally developed guidelines.

Hospital executives interviewed for the report, however, said they aren't ready to "hand over the keys" just yet.   They say that in order to pay physicians higher salaries, they will need to find funds elsewhere in the organization through improvements in the healthcare delivery model.  They need physicians to not only help reduce supply and infrastructure cost but also to generate additional revenue.  

There also is an issue of physician skills.  Hospital leaders who were interviewed say that most physicians lack the business management and leadership skills needed to be effective in positions of leadership and governance.

"To succeed in the future, hospital executives and physicians may both have to cede on money and control issues," said Brett Hickman, partner, PwC health industries advisory. "It's a new day, and hospitals and physicians are beginning to realize that they are better together than apart.   As in all healthy marriages, there can't be winners and losers.  It is a relationship that has to start with trust and transparency, something hospitals and physicians have previously lacked. Then it's a matter of investing in each other and working together toward shared goals that both sides buy into."

Next Generation of MDs Seeking Business Training and Work-Life Balance

From undergraduate studies through medical school and into residency and fellowship programs, physicians traditionally have focused on the science of medicine. The next generation of physicians, however, is more likely to also receive business training to prepare them for their future careers, says PwC. HRI's review of the required curriculum of the 10 largest medical schools by total active enrollment in the country revealed that no time is formally allocated directly to business-related training.  However, several universities are now offering joint MD/MBA programs.  In fact, 53 medical school-affiliated universities are recognized by the American Association of Medical Colleges for offering dual-degree programs, a reflection of the medical and academic communities' awareness of and response to the need to address changing educational needs of medical student.  

The availability of these programs is too late for today's doctors, which means they will need on-the-job training, an investment that hospitals must be willing to make, says PwC.  The report describes how some hospitals are addressing the skills issue by creating educational programs to teach physicians business theory and techniques related to quality improvement, outcomes management and staff development. Beyond skills, the second issue for physicians is time. Physicians who have traditionally been paid to generate volume in a fee-for-service compensation model have been driven to see more and more patients, leaving them little time for anything outside of their medical practice. The question is whether they have capacity to also take on hospital governance and management, at least so long as fee-for-service compensation reigns.

Over two-thirds of physicians surveyed by PwC feel confident they could devote more time to leadership roles and activities of hospitals. Three-quarters (77 percent) say they have time for greater involvement in performance improvement initiatives; 71 percent in hospital executive leadership, and 69 percent have time to serve on hospital boards.  

As part of larger well-documented generational trends, younger physicians are likely to want better work-life balance than their predecessors, making flexible compensation structures particularly appealing. In fact, not all physicians expect an increase in pay.  Seventeen percent of physicians surveyed said they would accept a decrease in overall compensation when considering employment by a hospital.

"The key for hospital executives will be to determine the right compensation package to offer the right physician, based on their individual aspirations and expectations," added Hickman.  "Physicians will be the key drivers in improving and sustaining clinical quality, and providing them with the right mix of compensation based on productivity and incentives will help hospitals increase revenue and avoid financial penalties."

The PwC report profiles three hospitals and the different approaches they have taken to address compensation, governance and practice standards issues.  These hospitals are Indianapolis-based Franciscan St. Francis Health, Huntsville (Texas) Memorial Hospital, which is affiliated with the Memorial Hermann Healthcare System, and SSM Health Care and Dean Health System of Wisconsin.  

From courtship to marriage is a two-part series on hospital-physician alignment by PwC's Health Research Institute, and is part of PwC Health Industries' ongoing exploration of health reform and its implications. A full copy of From courtship to marriage II is available at: www.PwC.com/us/PhysicianHospitalAlignment. From courtship to marriage I and other health reform reports from PwC are available at:  www.pwc.com/hri.    

Methodology

PwC's Health Research Institute commissioned an online survey of approximately 1,000 U.S. physicians, balanced by age, gender, practice type and specialty.  In addition, HRI analysts conducted 28 in-depth interviews with thought leaders and executives representing healthcare providers, payers and professional associations.  

About PwC's Health Research Institute (HRI)

PwC Health Research Institute (www.pwc.com/hri) provides new intelligence, perspectives, and analysis on trends affecting all health-related industries. The Health Research Institute helps executive decision makers navigate change through primary research and collaborative exchange. Our views are shaped by a network of professionals with executive and day-to-day experience in the health industry.

About PwC's Health Industries Group

PwC's Health Industries Group (www.pwc.com/healthindustries) is a leading advisor to public and private organizations across the health industries including healthcare providers, pharmaceuticals, health and life sciences, payers, employers, academic institutions and as well as non-health organizations with significance presence in the health market.  Follow PwC Health Industries at http://twitter.com/PwCHealth.

About the PwC Network

PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information.

© 2011 PwC. All rights reserved. "PwC" and "PwC US" refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.  This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

SOURCE PwC