I posted as note yesterday about the potential schism between hospital physicians and executives with the former more focused on the quality of patient care and the latter more on the financial side of the equation (see: Physicians Cautioned about Divided Loyalty between Patients and Hospitals). Pathologist John Spinosa responded to my note that was copied to Facebook by suggesting that the consideration of agency theory might be useful in this discussion. Here's a brief definition of this term from the Wikipedia:
In political science and economics, the principal–agent problem or agency dilemma concerns the difficulties in motivating one party (the "agent"), to act on behalf of another (the "principal")....For [an] example, consider a dental patient (the principal) wondering whether his dentist (the agent) is recommending expensive treatment because it is truly necessary for the patient's dental health, or because it will generate income for the dentist.
I searched the web and came up with an a scholarly article that was directly on point in terms of this discussion of the relationship between medical staff and hospital executives including consideration of agency theory (see: The ties that bind: an integrative framework of physician-hospital alignment). Below is an excerpt from it:
The relationship between the hospital and its medical staff is an important area of academic research and a main concern of hospital executives, given the impact on quality of provided care, hospitals' financial success and cost-effective healthcare delivery. Internationally, hospitals have evolved from a physician workshop to accountable organizations, charged with the development of internal organizations where quality and cost effectiveness go hand in hand. Consequently, cooperation and alignment between hospitals and their physicians has become paramount to enhance hospital performance. However, conflicting incentives between physicians and hospitals are often cited as a major obstacle to effective collaboration and threatens the long-standing assumption that physicians and hospitals share common interests....Three approaches can be identified. The first approach is rooted in the economic literature, building on the model of the homo economicus, in which alignment is realized by 'hard' financial means (economic integration). The second represents a more 'soft' sociological perspective, emphasizing the cooperative nature of their relationship (noneconomic integration). The third focuses on the clinical dimension of their relation, the coordination of patient care (clinical integration).
I found this paragraph insightful. Hospital executives bear the burden of ensuring that a hospital is economically viable (first approach). Physicians and other healthcare professionals such as nurses are responsible for the direct delivery of care, described in this excerpt as cooperative or non-economic integration of the relationship between physicians and executives (second approach). Finally, their interests should completely align in terms of the coordination of care, alternatively described as clinical integration (third approach) (see: Multidisciplinary Diagnostic Teams and Integrated Diagnostic Centers). One of the most effective ways to achieve coordination of clinical care is through the use of multidisciplinary teams (MDTs) that are commonly deployed in cancer centers and increasingly in other clinical settings. The analogue of such teams on the diagnostic side is multidisciplinary diagnostic teams.
Why do the interests of hospital physicians (primarily quality of care delivery) and executives (primarily economic) completely align in the area of clinical integration? It's because through the use of multidisciplinary teams and effective treatment algorithms that waste can be eliminated from care delivery, decreasing the cost of care while simultaneously increasing the quality (see: The Transition to "Big Med": Need for Emphasis on Standardization and Cost). In other words, physicians and executives will usually be on the same page when the reduction of unnecessary services increases the quality of care. Physicians and nurses best understand how such standardization can be accomplished.