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Creating the nexus.

Bonding of the medical staff to the hospital requires a structured leadership effort on the part of all interested groups. The participants should consist of members of the medical staff , the senior administration, and the board of trustees. The pathways to the bonding process require considerable thought, much planning, frank discussion, and, in many cases, a good deal of time to achieve success.

The prime goal of the process by which the interests of the medical staff and the hospital are bonded must be an efficient and effective health care delivery organization. To that end, the participants should jointly prepare a well-defined institutional mission statement. The statement should be built by consensus, and all participants should be able to sign it with comfort. This statement should become the foundation for the strategic plan of the institution. Consensus decision-making is a slow process requiring meaningful and candid communication, information sharing, and debate. Secondary agendas soon become obvious and will flaw, if not destroy, the process.

The mission statement may encompass many different elements--excellent patient care, charitable commitment to the community, educational commitment, medical research commitment, profit for a group of investors in the for-profit sector, and formation and preservation of capital in the not-for-profit sector. The elements of the mission statement give a framework upon which to build the institutional character.

The process of addressing the mission statement should engender the trust that needs to precede the bonding effort. Trust gives each group of participants the freedom to define its function and role in the institutional structure. Each group, through trust, is able to develop its tasks in concert with the other two groups in mutually supporting roles. The roles must be driven by the mission and must not be divisive to the overall strategic plan. Trust built upon a history of truth leads to a firm bond, converting three disparate groups into a cohesive organization to meet the mission and thrive in today's environment, as well as in the future.

The bonding effort may be augmented through the structure of the medical staff and its various functions. The medical staff appointment process may be tailored to require a commitment to the institution, and reappointment may be made dependent upon fulfillment of that commitment. This path should be pursued with extreme caution, should be based upon sound legal guidance, and win require constant surveillance.

The hospital may attempt to financially bond the new physician by a variety of subsidies.

*Start-up, guaranteed income arrangements may be offered. Typically, these arrangements are limited to a period of one to two years and are frequently based upon a reverse sliding scale determined by the practice or earned income of the physician.

*The hospital may offer to make or underwrite low-cost loans for start-up expenses. Some instiutions have written loans that are subsequently forgiven if certain revenue streams are generated.

*Established practices belonging to retiring physicians may be purchased by the institution and then given to new practitioners to protect referral patterns.

*Office space may be provided below or without cost to attract new practitioners into the hospital's service environment.

*Subsidized office personnel and supplies may be provided.

*Certain services, particularly pathology, radiology, anesthesiology, neurodiagnosis, and others, may be placed under an exclusive contract with a particular provider or with a group of providers.

Each of these methods presents potential fraud and abuse problems, as well as restraint of trade and antitrust considerations. The Internal Revenue Code provides that no part of the net earnings of a tax-exempt organization may inure to the benefit of any private shareholder or individual. According to the IRS, the term private shareholder or individual includes not only officers and directors but also staff physicians of a hospital. Caution is advised, and knowledge of the IRS "incidental benefit" test is of paramount importance. In attempts at financial bonding, the institution must remain aware that the competition in today's environment may stimulate a no-win bidding war with less than desirable outcomes.

The hospital may choose to offer a menu of bonding programs, such as:

* Accessibility to liability insurance through the hospital's affiliations or through hospital subsidization of liability premiums.

* Provision of administrative support to practices or practice enhancement through advertising or business support.

* Networking of primary care practices for mutual support and cross coverage.

* Export of ancillary services, such as laboratory, radiology, and specialty services into selected geographic areas in support of already established primary care practices.

* Provision of administrative and other support to the development of alternate delivery systems from the medical staff.

* Contracting with alternative delivery systems in order to make use of only affiliated medical staff members in the system.

These and other mechanisms bring both benefit and burden to the bonding process and must be very carefully tailored to the local envirnment. "Tending the commons" in a hospital is an extremely onerous task for the medical staff. The tasks demanded by accrediting bodies, other agencies, and government and judicial bodies have the potential of overburdening the most dedicated and highly bonded medical staff.

In the average 500-bed hospital the medical administrative workhours required of the medical staff can amount to 10-15 fulltime physicians. Assistance is needed to make the job easier and more meaningful to medical staff members called upon to perform these tasks.

* An informed staff is better able to perform its function in an effective manner. Consultation, site visits, seminars by experts, and abstract literature reviews with reference to current medical-administrative issues allows physicians to perform these tasks more easily.

* Systematized gathering and presentation of utilization review and quality data allows optimal use of physician time in decision-making roles.

* Downstream information dissemination from staff leaders to the attending staff can be ensured through internal publications, properly structured staff, or departmental meetings and an open door policy on the part of administrators.

*Time and energy in welcoming and orienting new physicians to the hospital environment is wen spent. A designated person from senior administration should review the expectations and requirements placed upon newly appointed medical staff members. This is also a good time to review the mission statement of the institution and clearly define the role the physician will have in meeting this mission.

* Consistent provision of support to the medical staff officers and department chairmen leads to effective and meaningful staff function.. This support should entail administrative as well as secretarial services. The persons providing secretarial services should be trained in departmental minute-taking and proper referral through the staff structure for action.

Provision of compensation to department chairmen, residency program directors, and other medical staff members for administrative duties is a widespread practice for bonding physicians. (Hospital compensation of medical staff officers raises many political problems and needs to be very carefully structured, if done at all.)

Pitfalls abound in today's health care environment. The relationship between the hospital and its medical staff is an extremely fragile one. Mishandling a program may throw the bonding process or even the already accomplished nexus into severe disarray. Issues and circumstances that disrupt the bond may include:

Perceived inequity in resource allocation to the various segments of the medical staff will lead to serious difficulties. Dividing the resources of the commons" in establishing domain requires consummate managerial and political skill.

* Undue restraint of physician's autonomy by imposition of difficult screening standards, particularly if developed without physician input, will disrupt the relationship.

*Attempts to induce income parity between specialty and subspecialty groups will tend to alienate high-income earners.

The hospital must be very wary of entering into promotional activities that may seem competitive to a segment of the staff.

* Decision-making that does not follow the established consensus route may estrange a previously committed staff.

* Decision-making with hidden or secondary agendas will surely disrupt bonds created by candor and trust.

*Catering to vocal or favored groups will cause discontent on the part of those who are not favored.

The bonding process may be difficult to fabricate in some environments. The deterrent factors include lack of commitment of the medical staff; a staff with multiple hospital loyalties; financial incentives for physicians to work elsewhere; too large a staff for hospital size; and lack of commitment by administration, board, or medical staff.

The bonding process is time-consuming, requires the effort of all participants, and remains fragile. The outcome of bonding must benefit all the groups involved. The strength and rationale of the bonding process, in addition to the bonding itself, may well influence the institution's ability to participate effectively in the delivery system that appears to be emerging in the health care arena.


At the time that this article was written, William M. Davis, MD, was Medical Director, Akron City Hospital, Akron, Ohio. He is now a medical management consultant in that city.
COPYRIGHT 1989 American College of Physician Executives
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Title Annotation:bonding the interests of the medical staff and the hospital
Author:Davis, William M.
Publication:Physician Executive
Date:Jul 1, 1989
Previous Article:Boards want leadership and decisiveness.
Next Article:Doing it right the first time.

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