More than ever before, the U.S. healthcare system is focused on improving outcomes while simultaneously lowering costs, as compensation systems shift from a fee-for-service model to one based on health outcomes.

Aligning and working in partnerships with hospitals can enable physicians to help guide the evolving healthcare system and enhance the quality of care, according to Kevin J. Bozic, MD, MBA, and Alexandra E. Page, MD, co-editors of the recently published Physician-Hospital Alignment: Strategies for Success, a Primer for Orthopaedic Surgeons.

Alignment basics
According to Drs. Bozic and Page, some of the increased emphasis on hospital-physician alignment stems from the following factors:

• Medicare’s focus on pay-for-performance programs
• the mandate for adoption of electronic medical records
• interest in shared savings programs, such as accountable care organizations (ACOs)

Although many hospitals have traditionally pursued alignment by employing physicians, such a move does not necessarily result in behavior changes affecting admission or practice patterns. In the past, making physicians employees has generally resulted in more overhead costs and poor alignment.

Newer models, such as ACOs, seek to improve both the quality of care and profit margins by aligning hospitals and physician groups to enhance the value of services provided.

To succeed under these models, open lines of communication are a must, as are clearly articulated roles and responsibilities, well-defined goals, performance metrics, careful consideration of the legal aspects, dispute resolution, and well-defined exit strategies.

Practicing surgeons also require “tangible, basic, operational improvements to the status quo, such as being able to perform more surgery in less time, having a reduced on-call burden, or providing patients with better customer service.”

Strategies for success
The primer outlines important considerations for achieving effective physician-hospital alignment. One strategy is service line co-management, a legal agreement between physicians and the hospital that recognizes and rewards participating medical groups/physicians for developing, managing, and improving quality and efficiency in the orthopaedic enterprise while both parties remain independent.

Other options include physician-hospital joint ventures, clinical integration, gainsharing, and developing and implementing bundled payments.

In addition, legal considerations, barriers and risks to alignment, and the large scale impact of alignment with a hospital are explored.

Physician-Hospital Alignment: Strategies for Success, a Primer for Orthopaedic Surgeons, was produced by the AAOS Health Care Systems Committee and is a benefit of your AAOS membership. The primer can be downloaded for free from the AAOS Practice Management Center at www.aaos.org/pacman

Jennie McKee is a staff writer for AAOS Now. She can be reached at mckee@aaos.org