I recently had a conversation with a couple of senior executives from a publicly traded healthcare company that owns and operates hospitals and medical groups throughout the United States. They complained that the doctors were making too much money and that they needed to hire someone who would “get tough” with them and figure out a way for the doctors to make less. The irony here is that the doctors are being paid under a production-based WRVU formula that was designed by the management of the health system. Isn’t it the “American Way” that the harder you work, the more money you make? I guess no one should be surprised that their stock price has gone down by 75% over the past twelve months. Unfortunately, over the past years I have heard this sentiment from other health system executives.
I’ve had some time to reflect on the comments of these two executives, I would like to share some thoughts and experiences of mine from working with physicians. Having run large medical groups, I believe healthcare executives should recognize the following when they work with their medical staff:
1) A Hospital is an empty building without physicians.
2) Physicians are one of their most important customers along with their employees and patients.
3) A major responsibility of healthcare CEO’s is to “Facilitate” the success of their medical staff. Typically, there is a direct correlation between the success of physicians and the success of their hospital. I’ve heard hospital CEO’s refer to doctors as “GREEDY” and say that “ALL DOCTORS WANT TO DO IS MAKE MONEY”! Don’t hospital CEO’s want to make money?
4) Extraordinary customer service should be the expectation of all the system’s management, employees, and physicians. The CEO must lead by example and be uncompromising when it comes to treating everyone with respect. A significant part of management’s compensation should be determined by their customer service scores. When I was a senior executive at several health systems, I would bring my doctors and management teams through the “Ritz Carlton Customer Service Training Program.” The first time I brought doctors through the program, the President of the Ritz came up to me and said; “I’m a cancer survivor. This is the first time any physicians have ever been through this program. They need customer service training more than anyone.” Physicians are quick learners. Extraordinary customer service is something that can be taught. Unfortunately, many healthcare CEO’s compromise on their expectation of requiring extraordinary customer service. When CEO’s preach customer service and then do not hold their management team accountable, the doctors see the hypocrisy in their behavior and act accordingly.
5) There is a “trickle down” effect in healthcare. When the doctors are happy, the employees are happy and the patients are happy. I would suggest that “Happy” physicians, employees and patients have a positive effect of quality of care and patient outcomes.
6) Healthcare CEO’s need to EARN the Trust, Confidence and Respect of their physicians and employees. This is EARNED through their behavior and actions. A health system CEO once came up to one of his physicians and asked, “How do I get my credibility back”? The doctor’s answer was simple; “Act Credible!”
7) When Physicians are paid under a “productivity-based” compensation plan, they can never EARN enough money! Once they’ve completed their guaranteed income period, doctors, who are paid from their own production, are paid nothing if they earn nothing.
8) Physicians should be treated as “Partners” in the health system where they work. Without the doctors, there is no health system.
I incorporated these principals when I was an executive at a health system in the Midwest. They resulted in our Physician, Employee, and Patients Satisfaction Scores all to be above the 90th percentile. We were one of the most financially successful health systems in the Midwest. We were chosen as one of the TOP 10 Employers in the State and finished as the runner-up to the State’s version of The Malcolm Baldrige National Quality Award.
Doctors are not the Enemy. They are a health system’s greatest asset!
While this article is not intended to be an indictment of all healthcare CEO’s, I’m confident that the CEOs, who are guilty of treating their doctors like the enemy, as well as their medical staffs, know exactly who I’m speaking about and have the ability to change their behavior, so that their health systems can become more prosperous.