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Competition between physicians and hospitals is increasing. Hospitals are making decisions whether to compete with physicians or to form joint ventures with them. Psychology, social conditioning and plain old market muscle all come into play in the daily collision of physicians with hospitals. The market power is in the hands of the physicians, especially those whose specialties are in short supply. If you are a surgeon in San Antonio with a specialty that is in short supply and you are tired of the lack of reimbursement for the work you do while on call, there are hospitals that will pay you $3,000 a day to sit and wait for someone needing surgery. Just don't ask the hospital to be happy about it.

There is a "Mars-Venus thing" that persists despite movement to improve the push/pull relationship in many parts of the country. It does not appear to be the case in the Greater Memphis Area as evidenced by lack of constructive dialogue between physicians and hospital administration. Controversies are pitting hospital business and medical leaders against one another.

One hospital system has historically gone "nuclear" when controversy arises between physicians, as evidenced a few years ago by a local hospital paying physicians $1 for the technical component for imaging performed in the physician's office. Hospitals are threatened by the normal process of change that is occurring through the moving of traditional inpatient services into outpatient services.

The fact is this: Technology marches on, but people often march backward or sideways or not at all. We are seeing an increase in the pace of different healthcare transactions and should continue to see the increase, unless new healthcare legislation or insurance companies slow it down. If this occurs, we will see a swing backward toward a focus on short-term benefits versus long-term gains, putting us back into a reactive stance. This has historically been the way traditional healthcare organizations have tried to preserve the status quo.

Physicians and hospital administrators will require a change in both mindset and philosophy. As referenced by many articles and editorials, we are past the tipping point in healthcare.

In a recent Futurescan study published by the American College of Healthcare Executives, hospital executives appear to be aware of the challenges facing physicians and hospitals relationships and working together for the common good of the community. The Futurescan survey shows that 91 percent of the respondents believe it is somewhat likely or very likely that they will form a joint venture with physicians during the next five years; 68 percent see a widespread physician shortage; 88 percent expect pay for performance; and 85 percent expect healthcare to become more competitive.

The hospital administrator that creates confrontational politics with doctors is shortsighted. Hospital administrators who keep the relationship open between hospitals and physicians will see physicians continue to bring inpatient cases to their hospitals and will forge positive relationships in bringing more payer contracts to this partnership.

Blame whichever side you want, but it would be unwise to understate what can happen when physicians and administrators get crossways with each other.

There is not much for a healthcare system or the American public to gain from having the physician and the hospital at each other's throats.

A collaborative process articulates what needs to be created to meet the current and future needs of healthcare delivery. Physicians and hospitals must admit their incompleteness in their current leadership styles and rally the many stakeholders around a vision of the future. There must be trusting relationships with each other through inquiring (listening with intention), advocating (explaining one's own point of view), and connecting (establishing a network of allies who can help accomplish shared goals) and imaging (coming up with a compelling image of the future). Physician and hospital leaders have to work together. Those who don't will find themselves at the helm of an unbalanced ship.


Bill Appling, principal of J. William Appling and Associates teaches strategic management and ambulatory healthcare at the University of Memphis.

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