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Recruiting and Training Physicians to Achieve their Full Potential as a Partner in Managed Care


Before managed care complicated the picture, physician recruitment was already a challenging process. Recruiters sought a blend of medical expertise and personality characteristics. Physicians were not only interested in the practice, but also in the management dynamics of local hospitals and the community’s appeal to their families. Today’s managed care environment adds a new dimension — before and after an offer is extended. Operating successfully in a managed care environment requires special physician skills. While most of the desired traits can be learned, a positive attitude is an essential feature. Specific questions asked during the recruitment process review candidates’ positions. Once on board, however, it becomes necessary for the recruiting party to provide appropriate training so the physician can function effectively. These days, most practices rely on outside resources to help accomplish this objective, in fact, hospitals, Physician Hospital Organizations (PHOs), and Physician Practice Management Companies (PPMCs) often are the entities paying for the recruitment process. These organizations can play an essential role in managed care education.

This article examines what to do before extending an offer to a physician and takes a look at how two entities – in markets with very different managed care penetration – train new physicians to become their partners in managed care.

Setting the Stage. First, know your managed care market and its future potential. Particularly in rural markets, current activity and contracts may be minimal. But things change. If you expect dynamics to shift in the near future, operate with that in mind.

Next, know what personal characteristics you desire in candidates. A positive attitude, willingness to embrace change, and a knack for the business side of medicine are attributes that bode well. The following questions can provide indications of these traits:

  • How do you feel about managed care? While few physicians respond in an enthusiastic manner, look for signs of acceptance and acknowledgement of marketplace realities. We’ve had clients turn down candidates that respond, “I want to move to your community to escape managed care.”
  • What adjustments or concessions are you willing to make to accept managed care contracts? If a physician adamantly refuses to make any changes, he or she is probably not a good choice. Those who focus on maintaining clinical integrity will probably become a good match. If the candidate expresses a need to better manage time and a desire to improve coding, you’ve got a live one who understands the needs and constraints managed care places on a modern medical practice.
  • What experience do you have contracting with or working for managed care organizations? There are no right answers to this question, however, experience is the best teacher. Physicians who have already operated under managed care have a diminished learning curve.

Case Study One

Recruitment Partner: Tift General Hospital, Tifton, GA

Market Profile: A 12-county rural market in South Georgia with limited, but growing, managed care penetration. Recruited about 30 physicians in a variety of medical specialties to group and individual practices during the past three years. The hospital has a PHO and is one of four owners of a regional PHO.

Key Resources: Irene Rude, executive director, Coastal Plains Health Alliance, LLC, a PHO for Tift General Hospital, Tifton, GA,; operations officer, South Georgia Health Partners, LLC a Regional PHO. Valerie Hall, director of marketing and business development, Tift General Hospital, Tifton, GA.

Tift General Hospital is prepared for the future. The hospital has a strategic plan that encompasses managed care and pro-actively organized a PHO, Coastal Plains Health Alliance, nearly five years ago. In addition the hospital is part owner of a Regional PHO. Managed care contracts do exist, but not to the same degree as in major metropolitan areas, such as Atlanta. Still, the facility didn’t want to be caught unaware. The PHO handles all contracting for the hospital and its physician members. While practices have the right to sign contracts outside the auspices of the PHO, few have done so.

While recruiting 30 physicians during the past three years, all candidates were screened for attitudes about the changing health care environment. Recruiters sought only candidates who exhibited flexibility and a desire to act as responsible partners. The hospital created a special orientation program for new physicians, providing information about how to market the practice, as well as information about consumer attitudes and behavior. While these seminars touched on managed care, the real training in managed care is conducted by the PHO.

A separate PHO orientation and in-depth discussions about managed care also contribute to building physicians’ foundation of knowledge. When new physicians join, the organization’s representatives discuss benefit designs, what collecting co-insurance means to them, and how to increase revenue and patient volume in the current environment. Additional topics include benefit plan summaries and relationships with third party administrators vs. employers. One key to success occurred before recruitment began. When the new PHO executive director, a veteran of several managed care organizations, came on board several years ago, she scheduled individual meetings with every one of the 75 or so physicians already practicing in the area. Those meetings went a long way toward establishing credibility and trust between the PHO and the physicians.

The PHO and hospital also schedule seminars for physicians about managed care, bringing in experts from top consulting firms to present the latest trends in healthcare. Often the officials at the lectern are physicians, providing a distinct advantage and appeal to the audience members. Even better attended are continuing medical education courses that address how to reconcile the business side of medicine with clinical and quality issues. Office managers receive separate training during regular monthly meetings. Coding issues, contractual language, contract nuances, and indicators to look for when patients present membership cards are among the topics discussed. Regular newsletters and periodic memos round out the communications process and keep physicians and their office staff apprised of current issues.

Beyond these training and informational mechanisms, however, the PHO and hospital subtly instituted a savvy method to ensure that physicians become true partners. “Most important,” says Irene Rude, executive director of Coastal Plains Health Alliance, is getting physicians involved at many level of the organization.” Physicians serve on a number of boards as directors and officers of committees dealing with pricing compensation, medical management, and contract review. “Their participation helps them begin to understand the inner workings of an organization such as this, and as they become more involved, they are instrumental in the education of their peers.”

Case Study Two

Recruitment Partner: Practice Dynamics, a for-profit PPMC subsidiary of Sinai Health System, Baltimore, MD.

Market Profile: Major US metropolitan area with between 60% and 70% managed care penetration. Capitated contracts account for 35-40% of managed care business; the remainder is primarily discounted fee-for-service.

Key Resource: Tom Ziesman, MHA, Chief Executive Officer, Practice Dynamics.

Practice Dynamics insists that its physicians have a managed care mindset. During the recruitment process Ziesman says, “If the candidate tells me that managed care is bad medicine and that the economic issues do not matter, chances are, they will not be hired. We are bound by the economic forces of managed care. The rules are not being dictated by me. If physicians want to succeed today in the practice of medicine, they must pay attention to managed care and the business side of health care.”

Of course Practice Dynamics is not merely recruiting physicians; it buys and operates existing practices. This company’s rigorous process, however, provides insight into the practices that are necessary in a fairly intense managed care market. After a physician completes the general interview, another significant step occurs. The company examines report cards issued by managed care organizations to the physician. A financial audit offers additional indicators, such as coding and documentation issues, as well as a comprehensive financial picture.

“We only want to buy practices that we can fix or those that are already doing things right,” the CEO explains. If a practice assessment is positive, an offer to purchase is made and intensive training follows.

Each practice receives a coding program that is managed by a certified coder. While such a process is expensive, Practice Dynamics considers this initiative essential to success. Physicians participate in educational programs about coding and learn how to integrate data into billing operations. “Improper coding,” says Ziesman, “will lose money hand-over-fist in terms of lost revenue or increased liability. Unfortunately, the coding rules change every day. It’s the obligation of the medical group to educate physicians about coding – you should not have staff members coding for physicians.”

Next, a feedback process is initiated. Physicians receive statistical feedback compiled from managed care plans. Discussions occur at least monthly and address topics such as DRGs, time spent with patients, the cost of care, how many codes were logged in a particular area and practice expenses. Ziesman considers it “very important” for physicians to manage the issues still under their control such as accurate coding, patient management, and revenue.

“These days,” says Ziesman, “it’s almost impossible to separate clinical issues from the economic factors of practice. The more physicians understand how to interact, the better off the practice is. You can’t live in a clinical bubble and not understand how what you do affects the business. Physicians are smart. They can understand the economic side of practicing medicine. The question is, do they choose to?”

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