For many healthcare systems, one of the most under-leveraged opportunities to drive revenue growth and improve strategic focus is the proactive management of physician relations. This is not to say that healthcare executives don’t take physician relations seriously. There is recognition in the industry that physicians are critical to a hospital’s success. Nevertheless, the reality is that such relationships are often managed reactively and mostly from the top of the organization, creating the opportunity for unpleasant surprises (such as when physician groups move some or all of their patients to a competing hospital or start their own free-standing clinic), and at a minimum, distracting CEOs from the more strategic issues that they should be addressing. Despite the on-going pressures for cost containment, this is an area where judicious investment of incremental resources can lead to competitive advantage and generate a high return to the system.

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