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Provider insights

Engaging physicians to transform operational and clinical performance

Filed under: Hospitals, Operations, Physicians & workforce

A confluence of events is advancing a “total cost of care” savings agenda in the US healthcare industry. Although the rate of growth in our healthcare spending has slowed in recent years, expenditures continue to rise. The United States now devotes almost 18 percent of its GDP—more than one in every six dollars earned—to healthcare. A step change in operational and clinical performance across the healthcare value chain is needed. This transformation requires robust leadership, and much of that leadership must come from clinicians, especially

physicians. Not only do physicians make many of the frontline decisions that determine the quality and efficiency of care, but they also have the technical knowledge to help make sound strategic choices about longerterm patterns of service delivery. Without physician engagement, even near-perfect execution on operational efficiency and utilization management will be insufficient to drive the necessary level of change and will never truly be sustainable. Thus, the active participation of physicians throughout the healthcare value chain, from individual practices to the national level, is mandatory for any provider or payor that wants to eliminate unnecessary costs or capture value from innovative partnerships (e.g., by reducing clinical variability and strengthening care coordination across settings.

To achieve a high level of engagement, both providers and payors must understand physicians’ attitudes about healthcare delivery and how those attitudes compare with their own goals and perspectives. To this end, McKinsey surveyed more than 1,400 US physicians from a range of geographies and specialties (including primary care, internal medicine subspecialties, and surgery) about a number of topics, such as readiness for reform, waste and inefficiency in healthcare, employment and alignment models, and financial risk sharing. We also conducted follow-up interviews with a subset of these physicians to understand underlying drivers and mind-sets. The survey builds on insights we developed leading large-scale clinical operations programs at more than 100 US hospitals; during those programs, we were able to find effective ways of engaging physicians to achieve sustainable improvements in the cost and quality of clinical care.

The survey enabled us to identify four key barriers to strong physician engagement in performance transformation: First, many physicians say that they feel overwhelmed and ill-equipped to implement change, and they appear to have a limited understanding of how their behavior contributes to healthcare waste and inefficiency. Second, too many providers and payors are focusing only on employment as a way to drive physician alignment, instead of taking a holistic approach that combines multiple alignment levers. Third, too often these organizations over-weight the importance of compensation as a way to influence physician behaviors. Fourth, physicians’ poor understanding of risk-based payment models, in combination with their risk aversion, is limiting the penetration of these models and their potential ability to drive higher-value care.

Health systems and health plans that want to deliver more cost-effective care must find ways to overcome these barriers. Both the survey results and our experience with clinical transformation programs suggest that many physicians are not only willing to change, but also excited at the possibility of leading transformation efforts. Providers and payors must therefore develop a true capability in physician engagement—something that is much broader than, and does not necessarily have to include, employment. They must also incorporate a wide range of levers in their engagement strategies so that they can tailor their efforts to different types of physicians. In addition, providers and payors must think carefully about how they use risk-based models (a critical tool for aligning physician incentives with cost-reducing objectives) to encourage behavioral change.

photo credit: yooperann

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