Dr Fragen in the operating room

Medical Staff – Hospital Alignment


I’ve been on staff and practicing at Desert Regional Medical Center for almost 20 years. During that time I have taken ED call for General Surgery and for half of that time for both Trauma and General Surgery. I have noticed many significant changes during that time.
Over the course of the past few decades the practice of hospital medicine has shifted significantly. Initially, ER call was the primary method of increasing your practice and with the payor mix there was never really an issue of either paid call or not having enough physicians taking call. Beginning around 15 years ago the reimbursement for physician services changed dramatically. It soon became obvious that office expenses were ever increasing and reimbursement was ever decreasing. The economics of the private practice physician was quickly becoming economically unfeasible.
Fundamentally the problem arises as many medical staffs, ours included, do not seem to understand the symbiotic relationship between themselves and the hospital. Many have openly expressed that the hospital wouldn’t exist without us. They don’t seem to understand that our livelihood also depends on a strong, viable hospital providing services and infrastructure that we depend upon. Most have no clear understanding of HCAPS scores, quality dashboards, PSI-90, or any other metrics by which hospitals are measured.

Giving Millenials a Bad Rap

As background, DRMC has never had large or even moderate sized physician groups. It has always been an aggregate of individual practitioners with a smattering of small groups. As the economics of medicine has shifted away from the viability of the solo practice towards a group practice, our physicians were set in their ways and seem unable to join together under any sort of meaningful cooperative venture. I believe that much of the current state, both in general and in specific, stems from the medical staff having a sense of entitlement. There are two distinct groups with different reasons for the sense of entitlement. Firstly, millennials, as a group, have a well documented sense of entitlement. This comprises our newer staff members. Secondly, our older, established physicians, seeing their reimbursement decline and their expenses increase believe they too are entitled because for years they supported the hospital and now they feel that the hospital owes them. With decreasing reimbursement there is more competition for patients.


Many specialists are holding the hospital hostage in exchange for ED call coverage. We have seen the rapid growth of hospital based physicians filling some of this demand. To these physicians the threat of no longer taking call is thrown at every opportunity to get something they need/want from the hospital.

Can’t Tell the Players Without a Scorecard

I believe the solution, or a solution, lies in the understanding that the economics of medicine has shifted from physicians with outpatient practices who often practiced at the hospital, to

  • outpatient practices who rarely practice at the hospital
  • outpatient practices who need the infrastructure and services of the hospital for their primary practice, and
  • hospitalist based physicians whose primary practice is the care of the emergency department patient and the inpatient.

The first group, those with outpatient practices who rarely practice at the hospital, aren’t the problem. Unfortunately they aren’t the solution either.
The last group, hospitalist based physicians, I believe, comprise the majority of the solution. However, the current economics of solely having a hospital based practice requires non-RVU based compensation in many circumstances. It really doesn’t seem to matter whether this practice is ER, Anesthesia, Radiology, Surgery, Trauma, Hospitalists, Intensivists, or OB Hospitalists. I think the opportunity to create buy-in with these groups is much greater as they clearly have more incentive to assist with hospital administrators and their goals.
The second group, solo or small group specialists, seem to have an unmistakable sense of self importance as they are the ones making all the money for the hospital. Because of this attitude they have little incentive or desire to assist in the overall goals of the hospital. They see the hospital as unable to exist without them.

I’ll Take Door Number…

I believe a hybrid solution is the answer. The administration should commit to a core group of employed physicians who would provide the bulk of the patient care for the ED and the inpatients. Whether these are directly employed physicians or physicians employed under a foundation model will depend entirely on State law and the hospital’s overall model. The traditional RVU based model will not work as the sole method of reimbursement as there are many intangibles, call coverage, physician alignment, etc. that are infinitely easier to accomplish and benefit the hospital more than simply counting RVUs. I refer to HCAHPS and other dashboard and quality metrics that may be difficult, if not impossible, to fully achieve without a motivated, responsive medical staff.
The challenge is with the second group. I believe here the solution may lie in creating service line co-management agreements with these specialists. It is important that membership in these agreements is controlled by the hospital and that there is a clear benefit to being a member and working towards the service line’s goals and objectives. Members could be given benefits, such as preferred scheduling of procedures as one example. Of course those not cooperating for the mutual benefit would loose out.
I understand that this is asking the hospital administration to offset declining physician reimbursement for the opportunity to have a much more engaged and aligned medical staff. I’m not quite sure an easier solution exists. But clearly having an engaged and aligned medical staff is essential to maximize both the quality and profitability of any hospital.
When I first became Chief of Staff, I told our CEO that if I had a problem, I would try to bring a solution as well. I never promised a perfect solution, but hopefully a starting point.
I believe there is a new paradigm in the delivery and practice of medicine and that new paradigm requires a tighter integration between hospitals and their medical staffs.
Any thoughts?