Blog Post

Aligning Children’s Hospitals and Physicians

Aligning-Childrens-Hospitals-and-Physicians

Healthcare reform has triggered waves of change across the U.S. healthcare market, forcing systems and providers to reevaluate how, when, where, and whom they partner with to deliver care. Responding to these changes is particularly challenging for children’s hospitals and pediatric physicians.

Given their unique position in the healthcare system and lingering uncertainties about the impact of healthcare reform, successful pediatric organizations are taking steps to align with strategic partners to ensure that their mission of serving the nation’s child and adolescent population is sustained.

This post is the first in a four-part series that explores ways in which children’s hospitals are forming collaborative partnerships with physicians, health systems, academic affiliates, and research partners to thrive in a value-based healthcare environment. We begin by looking at strategic alignment between children’s hospitals and physicians.

A Cause for Collaboration

Children’s hospitals are finding it increasingly necessary to build close affiliations with physicians to maximize their population health management (PHM) capabilities, expand clinical services, and better manage the continuum of pediatric care. The most successful hospital-physician alignment strategies will account for the differences between pediatric subspecialists and primary care physicians.

Strengthening Connections With Subspecialists

In the case of pediatric subspecialists, the foundation of stronger alignment is often already in place, as these providers have long been embedded in children’s hospitals. But the need to formally affiliate has taken on greater urgency in light of the Affordable Care Act (ACA) and the widening gap between professional reimbursement and the cost of practice.

Closer affiliations between hospitals and subspecialists can be accomplished in a variety of ways, the most common being:

  • Employed group practice model
  • Academic practice plans dedicated to pediatrics, distinct from adult practice plans
  • Aligned practices that are “friendly” or wholly owned subsidiaries
  • Foundation model, in states where employment is not allowed
  • Joint venture nonprofit models

These structures are effective affiliation vehicles because they promote and enable financial, strategic, technical, and leadership alignment. Still, the selection and efficacy of affiliations with subspecialists depend upon the requirements of parent organizations, legal requirements, history, organizational and practice culture, and many other factors.

A Different Approach to Primary Care

Unlike pediatric subspecialties, the practice of primary care pediatrics has remained largely private. But children’s hospitals are also reevaluating and adjusting their approach to primary care alignment. The increasing concentration on population health has elevated the role and stature of primary care physicians as valued partners in clinically integrated networks. As a result, we are seeing large health systems aggressively acquire pediatric primary care practices.

Still, many children’s hospitals are maintaining a traditional hospital/private medical staff approach to alignment, working with each practice individually to ensure that immediate needs for space, practice management, recruitment, or other services are met. Forward-thinking pediatric programs, however, are pursuing more proactive strategies. The spectrum of affiliation options for primary care physicians generally includes those shown below.

  • Traditional approach (some employed presence; closely aligned but distinct private practice relationships)
  • Employment
  • Aligned private practice
  • Clinically integrated networks

Successful affiliation and alignment can be achieved in a variety of ways, with options tailored to the unique cultural, financial, and environmental challenges facing children’s healthcare providers. But children’s hospitals and pediatric providers need to recognize and prepare for the fact that stronger alignment is inevitable. Children’s hospitals that do not address physician affiliation issues head-on and act in a timely way will certainly fall behind and risk losing strategic positioning and market share – locally, regionally, and nationally.

To learn more about the alignment strategies that children’s hospitals are exploring in the healthcare reform environment, see ECG’s white paper titled How Collaboration Can Drive Success at Your Children’s Hospital.

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