By Joel French, CEO of SCI Solutions
The pond referenced in a previous blog post has been stocked with koi, ranging in color, size and type. The pond store guy I bought them from was happy to sell me not only the fish, but all the fish food, pond treatment chemicals and various tools and equipment required to clean the pond, all of which was fairly expensive. After six months, I noticed the pond seemed to be dirty and in need of regular cleaning. When I asked the water feature contractor why the pond he installed was so dirty, he asked a series of diagnostic questions. Upon hearing the answers, he instructed me to stop feeding the fish. Naively, I was feeding the fish because the pond store guy was selling me fish, fish food and fish cleaning supplies – it seemed like the right thing to do. I stopped feeding the fish to see what would happen. One month later the pond was clean and, remarkably to me, the fish remained alive and seemed as happy as a fish seems to be. I have not fed the fish now in five years. My annual spend on fish food, pond chemicals and the cost of time to clean the pond was reduced nearly to zero. The pond is crystal clear.
Health systems have spent a lot of money on physician employment and monolithic EHRs used within their hospitals and physician practices. Today, employed physicians account for approximately 56 percent of practicing physicians. For most of these physicians, employment represented a shift from self-employment to a world in which typically a hospital or health system paid them a salary and covered the costs they previously had to absorb in office leases, equipment, staff, insurance, collections and information technologies. Their salaries today are given as a sure thing contractually. They still care about what is best for their patients, but their economic incentives to improve performance are typically not material to their earnings potential. As these contracts come up for renewal and demands for increased physician compensation introduce a burden on expense-constrained health systems, clear and transparent incentives driving physician leadership, conformity to evidence-based practice guidelines and better patient satisfaction will be essential to aligning health system/physician priorities and may be core to whether any return on the original practice acquisition is ever attainable. Just like hungry fish will clean their own pond, clearly incented and truly empowered physicians are central to health system performance improvement.