It may seem like a paradox, but the successful providers of the future will be those who find a way to improve quality while accepting lower reimbursements for procedures—and do it simultaneously. The 2010 Patient Protection and Affordable Care Act is an attempt to address that problem, but it's only part of the solution. The real solutions will come from payers and providers who will use the ingenuity of the market. The wild cards in this new model, however, are the physicians, and their roles are evolving at a faster pace than that of the industry.

A New Role for Physicians

The move toward accountable care under the PPACA will require physicians to change radically the way they practice medicine. In addition to quality measures, the PPACA seems likely to shift the industry from a fee-for-service structure to a payment system that has yet to be defined. However, nearly everyone agrees that reimbursements for services will drop. To keep costs low, hospitals and physicians will need to cooperate better.

"The message from the PPACA is to keep people out of the hospital by focusing on health maintenance, disease prevention and minimal interventions in lower-cost environments," says James V. Palermo, M.D., chief medical officer at Health First in Rockledge, Fla. "As physician leaders, we have to be able to capture the attention of our fellow physicians and heighten their awareness that they cannot stay on the sidelines. We need to make sure they are focused on outcome performance."

The changes set in motion by the PPACA and the broader shift toward an accountable care, integrated-delivery health care model will have major implications for physician leaders—both the role they play within a health care organization and the skills they need to perform that role. "The role of the physician leader used to be figuring out ways to generate more volume and move more patients through the system. Now, there is more of a movement toward advancing quality and reducing costs," says Mark Rumans, M.D., physician in chief at the Billings (Mont.) Clinic. "The physician leader has to work collaboratively with other members of the executive team to be at the forefront of this movement to deliver higher-quality, safer care."

The move toward evidence-based medicine, along with changes in physician compensation, will place greater demands on physician leaders. Physicians who were accustomed to relying on their personal experience when determining the best treatment plans now are being asked to follow research-driven, evidence-based medical protocols.

At the same time, volume-based physician compensation is being phased out in favor of more qualitative and subjective measures of quality and value. Physician leaders will have to play a major role in encouraging their fellow physicians to accept the evidence-based guidelines, while coaching them on how to maximize their compensation under the new qualitative incentive plans. Trusting their leader will be paramount.

Collaboration and Teamwork

The training that physicians receive in medical school prepares them to solve problems, but it does not necessarily teach them effective leadership or management skills. As a result, when physicians transition to a leadership role, they sometimes try to take the same approach to management problems that they took to medical problems. Rather than coaching and helping others solve problems, they might try to jump in and fix those problems themselves. If their team is not performing as well as they would like, some physician leaders respond by doubling their own efforts to model the type of behavior they would like their fellow physicians to emulate.

Independent problem-solving may serve physicians well during surgery, but it does not necessarily deliver as a leadership tactic. "Physician leaders have to instill in their physician colleagues the idea that we cannot continue to operate in the relatively authoritarian type of manner that we used in the past," says Palermo. "Physicians have to be much more collaborative. We need to understand how to function as part of a team and respect all of the contributions that our team members bring to the table to meet patient needs."

Teamwork and collaboration are essential not just for physicians, but also for physician leaders. "Physician leadership has become much more of a team sport," says Rumans. "On a day-to-day basis, physician leaders are working closely and collaboratively with other members of the leadership team, partnering with nursing leaders to reduce the variation in care and improve quality, or teaming with finance to find ways to reduce the cost of care."

Persuasion and Influence

Increasingly, Rumans says, physician leaders are called upon to play a change-management role. "We're asking our physicians to do things in a different way than they have [done] before," he explains. "Rather than having an individual physician and nurse take care of patients one-on-one, we now have a group of physicians, nurse care managers and nurses managing a population of patients with the help of data registries. To accomplish this shift, physician leaders must have the ability to manage change within a medical culture that has existed in its present form for decades."

Implementing major cultural change is difficult in any organization, but physician leaders have an additional challenge, as many of the physicians they supervise may not be employed by the hospital or health care facility in which they practice. "You may have a modicum of oversight from the medical staff bylaws, but really it can feel like you're trying to run a factory where you don't have a great deal of control over the people who are responsible for 90 percent of what goes on in the facility," says Palermo.

With hundreds or thousands of physicians on staff, physician leaders cannot hope to get their message out to every single doctor. To influence behavior and transmit messages to the entire medical staff, physician leaders first must identify physicians who can influence their peers. "If there are issues with quality, safety or utilization, you have to bring your facts to the table [with these influencers] and come with very credible data," says Palermo. "You cannot be an effective physician leader unless you are willing to roll up your sleeves and make your colleagues feel that you are personally involved."

Growing Responsibilities of Physician Leaders

Collaboration, teamwork, persuasion and influence are all critical day-to-day skills for physician leaders, especially as health systems look to employ more physicians directly to streamline the process. This development may give physician leaders more accountability and greater ability to effect change, but it also increases the responsibility of physician leaders to be able to articulate a clear, long-term vision, and then help guide their team toward achieving this goal.

Organizations must review the leadership skills of their physician leaders and provide them with opportunities to develop leadership skills outside their clinical expertise. It's the wild card that will be the game changer.

Stephanie Sloan, Ph.D., is a senior consultant at Hay Group in Atlanta. Rod Fralicx, Ph.D., is a vice president at Hay Group in Chicago.