Physicians under contract with a healthcare organization have dual accountabilities through the contract to management and through the medical staff bylaws to the medical executive committee (MEC). It is tempting for management to unilaterally manage performance issues through the contract and obviate the need for peer review or medical staff procedural rights; however, there is a price to pay for this expedient approach that may not be readily apparent including:

• Loss of trust and increased conflict between management and the medical staff
• Performance assessment or evaluation that is not up to professional review standards
• Failure to align the interests of physicians with those of the organization

These are serious issues and can leave scars, result in a lawsuit for inappropriate termination, and create unnecessary obstacles between management and the medical staff that results in failed economic and clinical engagement and alignment.

There is a better approach and it begins with good human resource (HR) and peer review policies that enable a healthcare system to act like a system through the use of transparent processes that permit improved communication between management and the medical staff, better alignment, and avoidance of unnecessary legal risk.

Such an approach includes:

1. Collaborative management of all physician performance issues through inclusion of management (e.g. CEO and CMO or VPMA) on an ad hoc basis in all peer review activities and inclusion of physician leaders (e.g. medical directors, medical staff officers) in all significant human resource activities
2. Delegation of peer review assessments and evaluations (e.g. FPPE/OPPE) to the organized medical staff through an efficient and standardized process
3. Delegation of progressive discipline to management so that corrective action may be taken through the contract and not through the medical staff bylaws
4. Frequent communication on a ‘need to know’ basis between executive and medical staff leaders to promote consensus and reduce potential conflict

This achieves the ‘best of all worlds’ by promoting improved communication and relations between physicians and management, providing employed physicians with a fair and effective peer review assessment by the medical staff and avoiding unnecessary cost and political conflict generated by medical staff procedural rights in the rare occasion when corrective action is necessary. Finally, it aligns the interests of both physicians and management to pursue high quality and lower costs by making the performance oversight process accountable, transparent, cost-effective, and fair.