As value-based care continues to expand, physicians are increasingly aligning with hospitals under several different models that tie outcomes to compensation, and many of them have pursued hospital employment. According to a recent American Medical Association study, for the first time ever, less than half of practicing physicians in the US own their own medical practice, while nearly one-third of physicians either work at a hospital-owned practice or are employed directly by a hospital—a 4% increase from 2012.
To succeed in this new paradigm, CFOs need to remember that they can’t just expect aligned or employed physicians to spontaneously become cost and quality champions. They instead need to forge deeper partnerships with physicians to address cost and quality of care. One of the greatest areas of variation and cost of care that physicians control involves the selection of the drugs and devices used to treat patients.
Lumere recently surveyed 276 physicians to assess how alignment, cost, variation and evidence affect their clinical decision-making processes. We’ll be publishing the full results of this study later this year, but below we highlight three key findings to guide CFOs to optimally work with their medical staff around optimizing costs of care.
- Degree of alignment does not necessarily equate to cost sensitivity. Physicians do not automatically become cost conscious when they become highly aligned or employees of hospitals. In fact, our survey indicates that employed physicians are less likely than unaligned physicians to switch to a lower priced medical device vendor.
- Physicians are life-long learners; give them the richest data available. About 90% of our respondents felt increasing physician access to cost data would improve quality of care, yet only 40% said their hospital had taken steps to do so. In fact, physicians with exposure to cost data, variation data and practice guidelines generally found cost data more influential than other factors in their decision to switch drug and device vendors, regardless of whether they shared in savings under value-based care models. This was particularly true for more veteran physicians and those with private practice experience who’ve had greater exposure to managing cost information.
- Physicians are driven by patient outcomes and clinical success. These need to be part of every conversation. Physicians want the total picture. This includes the clinical evidence to choose cost-effective drug and device alternatives without negatively affecting outcomes. As such, CFOs need to provide clinicians with access to variation data (not just cost data in isolation). These considerations are significantly more influential than factors such as industry representatives, costs, and hospital preferences or contracts.
In the final analysis, our survey provides strong confirmation that CFOs should concentrate on providing physicians with access to high-quality information that will support the pursuit of improved outcomes and reduced costs, ultimately leading to success under value-based care delivery models.