CONFLICT MANAGEMENT IN A MORE UNIFIED HEALTHCARE SYSTEM

Although no one knows what the future will bring, currently all signs point to a somewhat more unified healthcare delivery system involving physicians, NPPs and hospital systems.  Whether denominated as accountable care organizations or some other name, payors seem to wish for a comprehensive and/or value based payment bundling system, and physicians seek stable healthcare organizations to associate with and deal with.  The ever increasing complexity of regulation and billing issues, hospital sought synergy and efficiencies from ownership of physician practices and integration into hospital systems.  At the same time, hospital systems themselves are increasing in size both horizontally and vertically.

While such changes can be exciting to watch, such substantial changes involve taking traditionally separate practices, practitioners and systems and attempting to integrate them into a happily functioning system.  Sometimes there is not enough happiness and such conflicts must be anticipated and managed, perhaps with more precision than ever.  Litigation is the ultimate resolver of these disputes, but doctors, NPPs and hospitals are usually better served by having non-litigation conflict resolution mechanisms.  Additionally, practices, procedures and policies of good leaders help identify systemic conflicts between practice groups, hospitals, etc. and among such practice groups, to create a productive and pleasant workplace.

Several recommendations:

• Make conflict resolution part of your day-to-day system.  Such conflicts often indicate opportunities for improving not only the efficiency of the system, but also the general wellbeing of the system and its participants.  Having a system in place to keep disputes at a low level can pay great benefits in improving working condition, employee retention and avoiding devoting great resources to minor problems.
• Draft employment agreements and acquisition agreements in a manner that may not maximize your legal rights, but may maximize the return on investment by all involved.

I constantly review physician employment contracts with unrealistic non-compete provisions, unclear statements of expectations of duties, work times, on-call duties and participation on committees, peer reviews, etc.  These poorly drafted contracts create conflict even before relationships are cemented.  Often, it appears that these contracts are written by attorneys who simply do not understand the healthcare landscape and attempt to drive a “hard bargain” where a more reasoned approach, identifying true concerns of the hospital or physician as opposed to using boilerplate, hard-edged contracts would better serve physicians and hospitals.

• As mentioned above, hard-edged contracts are a problem.  Often there is no provision in acquisition agreements with hospitals, physicians and practices, or employment agreements, that provides for a softer, more immediate addressing of issues and resolution of these issues.  Forcing the parties to immediately go to litigation or arbitration often has terrible consequences for day-to-day workflow and creates long-term resentments.  Conflict is inevitable, plan for low-key, immediate resolution.
• Manage expectations – All parties in a system need to clearly identify those issues that are important to each of the parties, those ideas that are aspiration and those ideas or issues which are repeated by rote, but which may not be reflective of the needs of the individual or the system.

In some conflicts, resolution by continuing the relationship is not possible.  In those cases have an institutional approach that minimizes negative consequences for parties as the relationship is terminated.  Understand that physicians that leave will talk to physicians that you are recruiting.  Physicians and NPPs need to realize that hospital administrators and HR people learn which doctors are able to resolve conflicts professionally and positively, and which seem to leave a trail of anger and confusion upon departure.

This newsletter is edited by Paul Wallace of Jones ∙ Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians in health practices in contract items, federal legal compliance, creation of practice entities, estate and wealth planning and similar issues.  Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or pwallace@joneswallace.com.