Sarah O'Hara, Health Care Advisory Board
Much of the movement toward accountable care organizations (ACOs) has been premised on the argument that large, employed multispecialty physician groups can provide higher-quality, lower-cost care than physicians in small independent practices. As a result, conventional wisdom often holds up physician employment as the "best" platform for achieving meaningful engagement around performance. But is employment necessarily more effective than Clinical Integration (CI)? A deeper dive into the research shows that it's not the act of employment itself, but rather what you do with those employed physicians that makes the difference, with successful medical groups deploying strategies and structures that look very similar to those used by successful CI programs.
Deflating the mythology of the employed medical group
The merits of multispecialty employed medical groups have been cited repeatedly in the debate around health care reform, with no less than President Obama pointing publicly to organizations such as the Mayo Clinic as best-practice examples for the industry. But proof that large employed groups automatically and consistently outperform independent practices is actually rather thin. In 2008, the Commonwealth Fund conducted a comprehensive literature review entitled, "Physician Organization in Relation to Quality and Efficiency of Care: A Synthesis of Recent Literature." The report is a review of studies that attempted to answer whether organized physician groups provide better care, as defined by quality and efficiency indicators, than physicians who are not in organized groups. The general conclusion is that there does appear to be a correlation between integration and improved outcomes, but it's not strong, and it's not clear why. As the literature review says: "Although research suggests a link between group practice organizational attributes and quality or efficiency, researchers don't know exactly why these links exist, nor the direction of causality."
These findings are echoed in the Health Care Advisory Board's own research, which is currently examining how hospitals are managing their growing ranks of employed physicians. Our research interviews highlight a struggle to engage employed physicians around quality, efficiency, and other such strategic goals, even for hospitals with a long history of practice acquisition. In an effort to avoid the heavy financial losses that accompanied practice management in the 1990s--and to attract physicians who might otherwise be wary of an employment relationship--most hospital employers have worked hard to mimic the incentives and structure of independent practice--for example, by compensating physicians solely on productivity or by limiting requirements for standardization across the employed network. But these individualistic incentives, while effective in a pure fee-for-service environment, can be impediments as the conversation shifts toward population-level quality and coordination.
In fact, even experienced standalone (i.e., non-hospital-affiliated) employed physician groups are struggling with this shift. As the head of one 150-physician, 100-year-old multispecialty practice told us, "Productivity is part of our culture.... If we shift too quickly away from that in compensation, we'll antagonize our physicians." This group is beginning to formulate quality incentives and other mechanisms for improved care coordination, but only slowly. Membership in an employed medical group, in other words, does not lead automatically to integration and collaboration.
Deconstructing what functions do matter for performance
So, what aspects of physician "groupness" do make a difference for performance success? The Commonwealth Fund notes that for successful integrated groups, "Most likely, the attributes of cohesion, scale, and affiliation are proxies for other, more difficult to study, characteristics." The report then lists out several such functions cited by leaders of those high-performing groups, including the following:
Strong physician leadership
- Organizational culture that emphasizes "stewardship for both individual patients and populations"
- Clear, shared aims that encourage transparent data-sharing and coordination across different parts of the group
- Governance bodies that can set collective improvement goals and have authority to define plans to achieve those aims
- Accountability to employers and patients, coupled with information transparency and incentives (either external or internal) to improve quality
- Ability to select only those provider partners who meet standards and are relevant for meeting population health needs
- Patient-centered care teams
What's particularly interesting about this list is that employment is not necessary for any of these functions; every one of these characteristics can also be achieved by a CI program. Indeed, the most successful CI programs that we've seen very much pursue each of these functions, i.e.:
- Devolving key decisions to physician-led governance bodies
- Setting group-wide objectives for performance improvement and weeding out physicians who fall short of those aims
- Emphasizing both in name and in practice (i.e., through financial incentives or referral standards) the importance of collaboration and network-level success
- Aggressively sharing performance data both internally and externally.
Many CI programs are also beginning to invest in patient-centered care teams as a way to support participating primary care practices in a transition to the medical home model.
Exploring the relative advantages of CI vs. employment
None of this is to say that CI and employment are interchangeable in terms of their effectiveness in engaging physicians. Employment, for example, can offer two major advantages that CI cannot. First is the ability to exercise compensation as a tool for motivating physician behavior, in addition to access to joint contracts and performance-based pay incentives, which are available to all physicians through CI. Second is the ability to easily deploy hospital capital in building performance improvement infrastructure without the fraud and abuse concerns inherent in working with independent physicians--although it is worth noting that many hospitals have not yet made this investment within their employed networks. These advantages may ultimately give employment the edge for organizations that have the capital and physician interest to make it happen.
That said, despite a general industry-wide rise in practice acquisition, most hospitals are still far from employing the broad base of physicians they will need to truly effect performance improvement across the continuum. And as noted earlier, even those that are employing extensively haven't necessarily taken steps to build physician leadership, governance, culture, and other characteristics cited by the Commonwealth Fund as key to high performance. As a result, CI can offer some advantages of its own, allowing hospitals to engage physicians who want to remain in private practice and to begin building the infrastructure needed for all providers, whether employed or independent, to manage performance for success under new accountable payment models.
Interested in participating in research?
The Health Care Advisory Board's current research on physician employment is examining, among other things, how the presence of a CI program affects management of the employed physician base and vice versa. For example, do efforts to create "groupness" among employed physicians take a backseat when the hospital also has a CI program that's striving for the same objective on a broader scale? If your organization has addressed or considered issues like this one, and you'd be interested in participating in a research interview, please drop me a line at email@example.com.
For more information
The Health Care Advisory Board publication, The Accountable Physician Enterprise: Partnering with Physicians to Transform Care Delivery, includes a discussion of the differences and similarities between CI and extensive employment as platforms for building the physician base of an ACO. The relevant discussion begins on page 85.
The Commonwealth Fund report, "Physician Organization in Relation to Quality and Efficiency of Care: A Synthesis of Recent Literature," can be downloaded for free.
Two additional studies published since the Commonwealth Fund report may also be of interest. Both require a subscription to or purchase from the publications in question, but citations are provided below.
- Weeks WB et al, "Higher Health Care Quality and Bigger Savings Found at Large Multispecialty Medical Groups," Health Affairs, May 2010. Compares physicians in large multispecialty group practices against other physicians in the same markets using Medicare data. Some big name authors, and published in a big name journal, and puts all of this discussion into the context of accountable care.
- Solberg LI et al, "Is Integration in Large Medical Groups Associated with Quality?" American Journal of Managed Care, June 2009. Finds that "structural integration" (i.e., consolidation into a single organization) and "financial integration" (assumption of risk in and of itself) were less related to the provision of recommended chronic care systems than "functional integration" (e.g., clinical IT, care protocols, performance monitoring). In other words, how groups are organized and paid has less impact on quality than the services they have in place to support physician performance achievement. To the extent that integration facilitates providing those resources, because the group can better afford them, integration can be seen as leading to quality, but the study emphasizes that it is that it is not simply the act of integrating alone that creates the desired effect.