Financial assistance, management energy, and the mobilization of political capital for large-scale physician recruitment—all of these represent the potential expenditures of scarce organizational resources by healthcare organizations. Now, more than ever, as organizations “feel the squeeze,” they must incorporate medical manpower planning into their organizational strategies.
An early landmark 1974 RAND study for the State of California defined the fundamental questions medical manpower planning seeks to answer as follows:
“What will be the demand for, the need for, and the supply of physicians at a given time and place? What is the gap (if any) between estimated requirements and estimated supplies? What actions, if any, does a gap suggest?”
In the four decades since that statement, significant changes in population demographics, practice patterns, specialty utilization, and more than a few fundamental changes to the healthcare delivery system itself, have come together to shape the approach and the direction taken by planning experts and organizations. It has not, however, changed the central applicability of the questions posed in the RAND study or reduced the importance of the answers.
As this continuity suggests, it is not that medical manpower planning has suddenly “emerged” as a strategic activity. It has always been strategic in the sense of the “what” and the “where” that physician population ratios, complemented by adjustments for local market conditions, have served to identify. What has changed is the importance and increasing complexity of the “how” and the “why” that confronts today’s healthcare leaders.
Together, the employed and independent physicians who are closely aligned with a hospital comprise its physician enterprise. The alignment and differentiation around quality and value required for success in today’s healthcare environment must extend beyond those physicians employed by the hospital to include the independent community physicians. After all, in many markets it is independent physicians who continue to drive the preponderance of utilization and market share for a significant number of hospitals and health systems. Furthermore, Clinically Integrated Networks (CIN) compliant with the Federal Trade Commission (FTC) now make it possible for independent physicians in a community to generate significant competitive differentiation and alignment by acting in concert with one another and with their physician colleagues employed by hospitals. The standardization, collaboration, information systems, and demonstrated results required to achieve FTC compliance can result in meaningful integration across the participating physicians, translating into demonstrably higher value for patients and payers.
The success of new models for alignment between hospitals and physicians, as well as the implications for population health management, are only two such examples that demonstrate how physician manpower planning has become a complex initiative requiring more than simple physician-to-population benchmarks. While the information gained from this effort is a necessary starting point, it only shows a limited view of the factors that must be considered by a healthcare organization. For example, we find that the following questions are at significant risk of going unanswered when utilizing only a traditional approach to assessing physician manpower requirements:
- What is the likely impact of healthcare reform initiatives?
- What role does the current physician recruitment environment (e.g. supply, demographics, desired lifestyle and sub-specialization) play in our plan?
- What type of systemic risk should we anticipate financially if we pursue specific physician integration tactics with our plan?
- Who are our ideal physician partners and how will this impact our medical staff development decisions?
- Are we prepared to execute our plan as it impacts strategy, operational infrastructure, economic, and political risk?
No hospital asset—neither buildings, nor technology, nor other hospitals in a multi-hospital chain—is as valuable as a committed, sustainable, competitively differentiated, and specialty-diversified medical staff that meets the needs of its community. For hospitals and health systems, the right mix of physicians in the right places should be one of the most pressing strategic challenges and the highest priority an organization sets for itself.
Only by addressing the fundamental questions of medical manpower planning with a disciplined and integrative process that goes “beyond the ratios” will the investments of time, energy, and dollars provide sustainable returns for hospitals, physicians, and, most importantly, patients. As hospital and health system leaders know all too well, a strong medical staff is a community asset that requires continued attention and investment to build and leverage for the future.
The experienced team at PYA works with you to craft a strategy to define your community’s physician needs, ensuring that the right areas receive the focus and attention necessary for your organization’s success.
If you would like more information about physician differentiation or strategic planning, contact the experts listed below at PYA (800) 270-9629.
