Keys to Understanding the Relationship Between Primary Care and Hospital Revenue

A Summary of Marc Halley’s New Book: The Primary Care-Market Share Connection: How Hospitals Achieve Competitive Advantage, by Marc Halley, Chicago, Health Administration Press, 2007, www.ache.org/hapShareOffer

Points to remember include:

• The true measure of market share is the number of primary care physicians (PCPs) who refer patients to a hospital and its affiliated specialty physicians.
• Relationship management is key to attaining sustainable competitive advantage
• Sustainable competitive advantage requires that successful organizations remember their fundamental purpose: to create and keep customers, which comes down to the right targets, right processes, and the right execution daily

Summary:

p.6 Hospital CEOs need to focus on PCPs who create loyal groups of customers for hospital and its specialists by building long-term relationships with their patients

p.19 Most patients have difficult time recognizing clinical competence and quality; providing great clinical care is necessary but not sufficient in today’s consumer-driven environment, where convenience, accessibility, and responsiveness matter; moments of truth involve key episodes where patients come into contact with healthcare professionals and form lasting impressions (p.45)

p. 21-2 Patients generally do not self-refer to specialists and depend on medical professionals to refer them to specialists; complexity of care perpetuates this dependence; PCP referrals to specialists are usually based on past experiences, friendships, and recommendations from other PCPs in their practice rather than personal witness to specialist’s skill

p. 25-27 In competitive markets, providers sustain competitive advantage by making patients the center of their universe; retail readiness requires: positive word-of-mouth, knowledge of patients’ needs, wants, and priorities, convenience, providing high-quality information, setting expectations, customer service training, measuring the customer experience, and viewing complaints as opportunities to improve quality and service (see Appendix A: retail readiness questionnaire)

p. 31-3 Primary care = market share, which must be understood by all members of the demand chain; loftiest mission statement is irrelevant unless organization is able to find and keep patients to care for

p.62-9 very few organizations can prove that they have the best physicians; to retain referral base, specialists need to demonstrate convenient access and respect by acknowledging referral, engaging the PCP in treatment decisions, sharing knowledge and expertise, and returning patient to PCP for f/u care

p.93-95 foundation of successful physician-hospital partnerships is mutual purpose, incorporating mission, vision, values, strategies, and tactics to produce consistent clinical quality, outstanding service, financial viability, and mutual benefit; successful partnerships are characterized by true dialogue- the ability to identify what is right rather than who is right

p. 125-7 Demand-chain management is a process to attract and retain market share, not an event; collaboration will increase the size of the pie; use following steps:

• Ask what is working well?; talk to clinically respected physicians about their needs, wants, and priorities; identify referral patterns and rationale; learn their expectations of other physicians re: access, dialogue, and outcomes
• Engage service-line physicians re: hospital’s retail strategy and demand-chain management, meeting monthly to review service-line performance and share best practices
• Improve performance
• Broaden physician participation; use established service line program to improve demand-chain management in a different service line, using physicians as educators

p.143 Organizational change brings out the best and worst of every culture; fundamental indicator of organization’s ability to assimilate change is whether the organizational culture requires individual accountability for performance; 2 types of performance accountability: to patients and referring physicians and to other members of the demand chain; people must be willing to discuss performance shortfalls, share best practices, and change behavior; important to distinguish between activity and outcomes; successful demand chains never occur by chance (p. 155); accountability requires an accounting

p. 144 Questions to ask:

• Did you accomplish what you committed to?
• What barriers did you encounter?
• How soon can you accomplish the work?

p.146-50 Building a culture of accountability requires:

• Effective sponsorship: the willingness to sanction organizational change, breaking from the status quo and overcoming barriers to implementation; sponsors set performance standards and exemplify performance
• Shared purpose
• Clear performance targets, deadlines, and measurement systems to achieve short- and long-term objectives
• An effective implementation team
• A players who are not afraid to hire other A players; assisting others to improve performance; hire slow/ fire fast

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