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How to govern physician-hospital exchanges: contractual and relational issues in Belgian hospitals

Jeroen Trybou (UGent) , Paul Gemmel (UGent) and Lieven Annemans (UGent)
Author
Organization
Abstract
Objective: Our aim is to investigate contractual mechanisms in physician-hospital exchanges. The concepts of risk-sharing and the nature of physician-hospital exchanges – transactional versus relational – were studied. Methods: Two qualitative case studies were performed. Hospital executives and physicians were interviewed to develop an in-depth understanding of contractual and relational issues that shape physician–hospital contracting. The underlying theoretical concepts of agency theory and social exchange theory were used to analyse the data. Results: Our study found that physician-hospital contracting is highly complex. The contract is far more than an economic instrument governing financial aspects. The effect of the contract on the nature of exchange -whether transactional or relational- also needs to be considered. While it can be argued that contractual governance methods are increasingly necessary to overcome the difficulties that arise from the fragmented payment framework by aligning incentives and sharing financial risk, they undermine the necessary relational governance. Relational qualities such as mutual trust and an integrative view on physician-hospital exchanges are threatened, and may be difficult to sustain, given the current fragmentary payment framework. Conclusions: Since health care policy makers are increasing the financial risk borne by health care providers, it can be argued that this also increases the need to share financial risk and to align incentives between physician and hospital. However, our study demonstrates that while economic alignment is important in determining physician-hospital contracts, the corresponding impact on working relationships should also be considered. Moreover, it is important to avoid a relationship between hospital and physician predominantly characterized by transactional exchanges thereby fostering an unhealthy us-and-them divide and mentality. Relational exchange is a valuable alternative to contractual exchange, stimulating an integrated hospital-physician relationship. An altruistic view of the physician is applied and trust-based relationships are established with a focus on long-term cooperation. Unfortunately the fragmented payment framework characterized by unaligned incentives is perceived as an obstacle to realize effective collaboration.
Keywords
HEALTH-CARE, Contractual Governance, AGENCY THEORY, TRUST, Case study research, Hospital-Physician Relationships, Relational Governance, SERVICE, ORGANIZATIONS, PERFORMANCE, AUTHORITY, FRAMEWORK, DOCTORS

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MLA
Trybou, Jeroen, et al. “How to Govern Physician-Hospital Exchanges: Contractual and Relational Issues in Belgian Hospitals.” JOURNAL OF HEALTH SERVICES RESEARCH & POLICY, vol. 19, no. 3, 2014, pp. 145–52, doi:10.1177/1355819613518765.
APA
Trybou, J., Gemmel, P., & Annemans, L. (2014). How to govern physician-hospital exchanges: contractual and relational issues in Belgian hospitals. JOURNAL OF HEALTH SERVICES RESEARCH & POLICY, 19(3), 145–152. https://doi.org/10.1177/1355819613518765
Chicago author-date
Trybou, Jeroen, Paul Gemmel, and Lieven Annemans. 2014. “How to Govern Physician-Hospital Exchanges: Contractual and Relational Issues in Belgian Hospitals.” JOURNAL OF HEALTH SERVICES RESEARCH & POLICY 19 (3): 145–52. https://doi.org/10.1177/1355819613518765.
Chicago author-date (all authors)
Trybou, Jeroen, Paul Gemmel, and Lieven Annemans. 2014. “How to Govern Physician-Hospital Exchanges: Contractual and Relational Issues in Belgian Hospitals.” JOURNAL OF HEALTH SERVICES RESEARCH & POLICY 19 (3): 145–152. doi:10.1177/1355819613518765.
Vancouver
1.
Trybou J, Gemmel P, Annemans L. How to govern physician-hospital exchanges: contractual and relational issues in Belgian hospitals. JOURNAL OF HEALTH SERVICES RESEARCH & POLICY. 2014;19(3):145–52.
IEEE
[1]
J. Trybou, P. Gemmel, and L. Annemans, “How to govern physician-hospital exchanges: contractual and relational issues in Belgian hospitals,” JOURNAL OF HEALTH SERVICES RESEARCH & POLICY, vol. 19, no. 3, pp. 145–152, 2014.
@article{4251851,
  abstract     = {{Objective: Our aim is to investigate contractual mechanisms in physician-hospital exchanges. The concepts of risk-sharing and the nature of physician-hospital exchanges – transactional versus relational – were studied.
Methods: Two qualitative case studies were performed. Hospital executives and physicians were interviewed to develop an in-depth understanding of contractual and relational issues that shape physician–hospital contracting. The underlying theoretical concepts of agency theory and social exchange theory were used to analyse the data.
Results: Our study found that physician-hospital contracting is highly complex. The contract is far more than an economic instrument governing financial aspects. The effect of the contract on the nature of exchange -whether transactional or relational- also needs to be considered. While it can be argued that contractual governance methods are increasingly necessary to overcome the difficulties that arise from the fragmented payment framework by aligning incentives and sharing financial risk, they undermine the necessary relational governance. Relational qualities such as mutual trust and an integrative view on physician-hospital exchanges are threatened, and may be difficult to sustain, given the current fragmentary payment framework. 
Conclusions: Since health care policy makers are increasing the financial risk borne by health care providers, it can be argued that this also increases the need to share financial risk and to align incentives between physician and hospital. However, our study demonstrates that while economic alignment is important in determining physician-hospital contracts, the corresponding impact on working relationships should also be considered. Moreover, it is important to avoid a relationship between hospital and physician predominantly characterized by transactional exchanges thereby fostering an unhealthy us-and-them divide and mentality. Relational exchange is a valuable alternative to contractual exchange, stimulating an integrated hospital-physician relationship. An altruistic view of the physician is applied and trust-based relationships are established with a focus on long-term cooperation. Unfortunately the fragmented payment framework characterized by unaligned incentives is perceived as an obstacle to realize effective collaboration.}},
  author       = {{Trybou, Jeroen and Gemmel, Paul and Annemans, Lieven}},
  issn         = {{1355-8196}},
  journal      = {{JOURNAL OF HEALTH SERVICES RESEARCH & POLICY}},
  keywords     = {{HEALTH-CARE,Contractual Governance,AGENCY THEORY,TRUST,Case study research,Hospital-Physician Relationships,Relational Governance,SERVICE,ORGANIZATIONS,PERFORMANCE,AUTHORITY,FRAMEWORK,DOCTORS}},
  language     = {{eng}},
  number       = {{3}},
  pages        = {{145--152}},
  title        = {{How to govern physician-hospital exchanges: contractual and relational issues in Belgian hospitals}},
  url          = {{http://doi.org/10.1177/1355819613518765}},
  volume       = {{19}},
  year         = {{2014}},
}

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