Doctors Feel Excluded from Health Care Value Efforts

This article was originally published on HBR.org on Oct. 6th, 2017.

Executive Summary

U.S. hospitals and healthcare groups have experimented over the past decade with new management structures and alternative payment models to provide quality healthcare at lower cost. But physicians have been slow to embrace these for a host of reasons. Chief among them, Bain and Company research shows, is that they feel excluded from the process. Healthcare organizations can generate greater support for value-based care by working closely with their physicians to shape these care models and by addressing doctors’ concerns about implementation and outcomes.

U.S. hospitals and health care groups have experimented over the past decade with new management structures and alternative payment models to provide quality health care at lower cost. But physicians have been slow to embrace these for a host of reasons. Chief among them, our research shows, is that they feel excluded from the process.

The only practical way to make value-based care a reality is for health care organizations to bring physicians back into the decision-making process. After years of experimentation, doctors want evidence that new models for health care management, reimbursement, and policy will actually improve clinical outcomes for their patients. Without it, they see little reason to alter the status quo. That’s a fundamental and overlooked obstacle to progress. And it explains why management-led organizations that have not embraced physician input have run into resistance.

It may sound odd to suggest that the industry overlooked physicians as it set about reshaping the health care system. But that’s how physicians see it. With our colleagues at Bain & Company, we recently surveyed 980 U.S. physicians in eight specialties, 100 health system finance officers, as well as 100 health system procurement officers — the people in charge of buying supplies for hospitals. What we found was startling: Physicians clearly understand the challenge posed by rising costs for clinical care and prescription drugs, but many don’t feel they are in a position to help rein in costs. They do not feel sufficiently engaged in making important decisions about cost control, performance improvement, and adoption of new reimbursement models. Indeed, many feel overruled, with mandate after mandate from hospitals and management-led health organizations being done to them, not with them.

Insight Center

By sidelining doctors, the health care industry has overlooked a key principle in change management — and undercut its own efforts. Physicians who are not aligned and engaged with their organization have more reasons to resist new systems, such as value-based-payment models. By contrast, physicians who are engaged in decision-making are much more satisfied with the working environment and are more willing to lead change. Our research and experience shows that health care organizations that give physicians a say in management decisions are able to create greater momentum for change.

Physicians are particularly hesitant to embrace new systems when the clinical implications and the return on investment are unproven and the administrative burden is significant. A comparison of our 2015 and 2017 survey findings shows a notable slowdown in the adoption of value-based payment models. Two years ago, many physicians expected a broad rollout of value-based care and a corresponding decline in practices exclusively using the traditional fee-for-service model. But providers have been slow to embrace value-based care, citing concerns about implementation and lack of evidence that it results in better outcomes.

More than 70% of physicians told us they prefer the fee-for-service model, citing concerns about the complexity and quality of care associated with value-based-payment models. Fifty-three percent of physicians say that capitation reduces the quality of care, and most see little advantage from pay-for-performance models either. Further, many believe their organizations are not sufficiently prepared for the shift to value-based care.

One bright spot is the evolving role of physicians in the purchase of medical equipment. It highlights the kind of collaborative approach to decision making that could help create a more supportive climate for value-based care. Ten years ago, hospitals shifted decision making away from surgeons and toward procurement professionals who chose products mainly on the basis of price, often putting the two groups at odds. Since then, many hospitals in the United States have reversed course, giving surgeons a bigger say in medical-equipment purchasing — and that’s transformed attitudes. More than 80% of surgeons and procurement officers told us they now work in collaborative partnerships to purchase medical equipment, weighing clinical and economic value together, and surgeons broadly support this arrangement

Collaboration has created a virtuous circle. As surgeons take on greater decision-making authority, they become more sophisticated buyers, weighing both clinical and financial data when they select devices. Forty-three percent of surgeons now believe their procurement department improves costs and quality of care. Surgeons engaged in decision making also are more likely to promote their organizations and be aligned with their missions.

Giving physicians a greater say increases their commitment to change. When we asked physicians if they would recommend their organization as a place to work and practice, we found a 108-point difference (+47% vs. -61%) between those who said they were highly engaged in decision making and those who were not.

Health care organizations can generate greater support for value-based care by working closely with their physicians to shape these models and addressing doctors’ concerns about implementation and outcomes. It will take time to develop clinical and economic evidence, which means the pace of change will remain slow. But it will also help the industry move toward better solutions.