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Preventive Maintenance: Reassessing Physician Integration and Alignment for Sustainability

Now that major impacts from the COVID pandemic on the practice of medicine are largely past, now is a good time to conduct a comprehensive tune-up of your organization’s physician integration and alignment. Physician engagement and alignment are top strategic priorities for health systems, academic medical centers, physician enterprises, and other healthcare organizations. Misalignment creates:


  • Dissatisfied patients

  • Uncoordinated care

  • Inequitable access to care

  • Escalating costs

  • Conflicts (e.g., improving clinical quality vs. controlling financial costs)

  • Loss of power, prestige, and income among physicians

  • Physician discontent, resentment, and resistance to change


Various integration alternatives comprise a portfolio by which physicians integrate with an enterprise, from employment and foundation models in California, to medical groups and IPAs, clinically integrated networks, contracting, practice management platforms, and direct or indirect support payments (e.g., call coverage fees, managed care network payments, electronic health record subsidies, physician recruitment support funds). Whereas some approaches pursue specific opportunities in a local market (e.g., growth of clinical programs, access, coverage), others address market-specific challenges (e.g., competitive threats, failing hospital coverage panels, destabilization of independent practices, workforce shortages, financial pressures, burnout, dissatisfaction among physicians). While many reasons for physician integration remain valid, some cases are intensifying. Achieving the right balance among various models and initiatives is required to achieve market competitiveness, patient service, clinical quality, financial sustainability, and other objectives.


Competition for physicians involves a complex number of players, among them: physician-owned medical groups, health system-owned medical groups, non-equity partners, national medical group franchises, health plans, and private equity firms (Advisory Board, July 2023).



Reimagining physician strategy and alignment requires several key steps:


  1. Establish a bold vision. Does your organization want to achieve magnet physician enterprise status? best-of-breed in your local market? What are your objectives (e.g., growth, access, throughput, productivity, quality, physician lifestyle)?

  2. Conduct a comprehensive diagnostic. Compile your organization’s physician integration activities. Evaluate performance based on clinical outcomes, economics, practice performance, in-network referrals, referral retention, and the importance of the activity to your organization.

  3. Address a new normal. Initiatives should be assessed against the new normal following COVID. How much of primary care is performed digitally through self-management, virtual care, and/or home care (e.g., up to 65% or more)? Have innovative care processes and practice re-design been incorporated, including through partnerships?

  4. Segment customers. To what extent are customers segmented? Have consumer-focused offerings been designed to grow segments and promote customer service?

  5. Achieve optimal and minimally sufficient scale. Does your comprehensive physician integration portfolio optimize scale? Do individual models within the portfolio achieve minimum sufficient scale? Are there opportunities for virtual aggregation to compete for the consumer at the “front end”?

  6. Review physician reimbursement and incentives. Are reimbursement payment structures and incentives optimized relative to organization goals and work standards?

  7. Improve performance. Does your enterprise deploy a more efficient and effective use of labor with advanced staffing models, including a greater use of nurse practitioners and physician assistants? How has technology improved key performance metrics?

  8. Design a scorecard and track key metrics. Does your organization have a physician scorecard across various initiatives? Have key metrics been updated and measured? How are performance deficiencies communicated, discussed, and addressed?


These and other intentional steps can help your health system, academic medical center, or physician enterprise to optimize physician alignment and integration.


Several lessons learned can be gleaned based on BDC Advisors’ experience with physician integration and alignment efforts:


  • Assimilate physicians effectively at all levels of the enterprise, providing leadership roles in the design, implementation and operation of an integrated medical group or health system.

  • Deploy a continuum of strategies from macro to micro that span funding, administrative, organizational, service delivery, and clinical priorities.

  • Take advantage of existing networks, utilize informal linkages, and maintain a strong patient focus among practitioners.

  • Ensure recruitment and retention through compensation mechanisms, financial incentives, and ways to improve work-life balance.

  • Target communication and access, values and teamwork, and commitments and incentives to deliver integrated care.

  • Commit resources to the development of processes and strategies that support physician integration and alignment over the long-term.


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If you would like to discuss physician strategy issues and opportunities, please contact Bob Dickinson, Managing Director, BDC Advisors at (415) 971-7327 or bob.dickinson@bdcadvisors.com.

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