Physicians
Physicians at Floyd Memorial are another extremely important reason why Floyd Memorial continues to thrive.
Most people do not realize that hospitals absolutely cannot thrive without physician leadership, support, and affiliation.
Compared to Clark Memorial, we are virtually the same size in patients and gross revenues. But Floyd has continued to financially thrive while Clark has been in the red for the past 2 years. They appear to be further in the red for 2005.
The reason is simple. Their largest primary care physician group does not support the hospital like physicians in Floyd County. Their largest group is owned by Norton’s. The office has its own lab, x-ray, and CAT scan facility. They rarely need the services of the hospital and when they do need to admit patients, they are directed to a Norton facility.
Without a primary care physician base, it is very difficult to survive. Hospitals rely on outpatient services to financially support the losing inpatient services. Hospitals have huge fixed overhead expenses that pure inpatient reimbursement cannot cover.
Twenty to 30 years ago, there was plenty of money for hospitals and physicians. Services were paid without significant discounts or write-offs. Hospitals didn’t need to establish close ties with physicians to survive. Money was not usually a problem. But today is completely different. There are limited resources and physicians and hospitals are constantly competing for the same revenue.
This is why it is imperative that physicians and hospitals learn to work together. There has to be an attitude of having a win-win relationship. Physicians will continue to transition to outpatient settings they own themselves. This is done because it is the only way to maintain income. Just providing office services cannot maintain the overhead and salaries. Insurance companies continue to cut fee schedules and have not kept pace with inflation, all while requiring more hurdles to jump.
Twenty years ago, most eye surgeries were done in the hospital. Not any more. Today, colonoscopies and other scoping procedures, stress tests, ultrasounds, EMG’s, x-rays, Cat Scans, MRI’s and many others are done in outpatient facilities.
Some of these are owned by physicians, some by hospitals and some by others. The bottom line is that if physicians and hospitals don’t learn to partner rather than compete, the hospital will lose. Hospitals have patients for one reason. Physicians send them there or give the orders for the tests. If physicians do not have a good working relationship with their hospital, they will eventually do things themselves. This is the paradigm shift. This is why CEO’s taught 20 years ago will have to adjust and change or face the downward trends in their facilities. Some CEO’s may be able to make this transition, but others will not.
Board Members also are typically from the same generation as the CEO. They too must understand the implications of this scenario and paradigm shift and make appropriate decisions for the benefit and future success of the hospital. Waiting until there is a problem, not only is failing to do their jobs, but it is a disaster for the long-term goals of the hospital.
Physicians can be a hospital’s greatest asset or as Clark County is learning, they can be their biggest adversary. The choice belongs not to employees who make hospitals what they are, but to the CEO and Boards who must understand this paradigm shift.
Most people do not realize that hospitals absolutely cannot thrive without physician leadership, support, and affiliation.
Compared to Clark Memorial, we are virtually the same size in patients and gross revenues. But Floyd has continued to financially thrive while Clark has been in the red for the past 2 years. They appear to be further in the red for 2005.
The reason is simple. Their largest primary care physician group does not support the hospital like physicians in Floyd County. Their largest group is owned by Norton’s. The office has its own lab, x-ray, and CAT scan facility. They rarely need the services of the hospital and when they do need to admit patients, they are directed to a Norton facility.
Without a primary care physician base, it is very difficult to survive. Hospitals rely on outpatient services to financially support the losing inpatient services. Hospitals have huge fixed overhead expenses that pure inpatient reimbursement cannot cover.
Twenty to 30 years ago, there was plenty of money for hospitals and physicians. Services were paid without significant discounts or write-offs. Hospitals didn’t need to establish close ties with physicians to survive. Money was not usually a problem. But today is completely different. There are limited resources and physicians and hospitals are constantly competing for the same revenue.
This is why it is imperative that physicians and hospitals learn to work together. There has to be an attitude of having a win-win relationship. Physicians will continue to transition to outpatient settings they own themselves. This is done because it is the only way to maintain income. Just providing office services cannot maintain the overhead and salaries. Insurance companies continue to cut fee schedules and have not kept pace with inflation, all while requiring more hurdles to jump.
Twenty years ago, most eye surgeries were done in the hospital. Not any more. Today, colonoscopies and other scoping procedures, stress tests, ultrasounds, EMG’s, x-rays, Cat Scans, MRI’s and many others are done in outpatient facilities.
Some of these are owned by physicians, some by hospitals and some by others. The bottom line is that if physicians and hospitals don’t learn to partner rather than compete, the hospital will lose. Hospitals have patients for one reason. Physicians send them there or give the orders for the tests. If physicians do not have a good working relationship with their hospital, they will eventually do things themselves. This is the paradigm shift. This is why CEO’s taught 20 years ago will have to adjust and change or face the downward trends in their facilities. Some CEO’s may be able to make this transition, but others will not.
Board Members also are typically from the same generation as the CEO. They too must understand the implications of this scenario and paradigm shift and make appropriate decisions for the benefit and future success of the hospital. Waiting until there is a problem, not only is failing to do their jobs, but it is a disaster for the long-term goals of the hospital.
Physicians can be a hospital’s greatest asset or as Clark County is learning, they can be their biggest adversary. The choice belongs not to employees who make hospitals what they are, but to the CEO and Boards who must understand this paradigm shift.
posted by Anonymous at 5:28 AM
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