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5 Questions Every Health System Leader Should Ask About Integration
5 Questions Every Health System Leader Should Ask About Integration
By Jerry Penso, MD, MBA
December 2, 2025
As I travel the country and meet with senior leadership at health systems, I’ve been hearing from CEOs, COOs, CFOs, and Chief Physician Executives who are all circling the same core concern: "How can we be sure our hospital and physician leaders are truly aligned and collaborating effectively?"
That question has only grown more urgent as the pace of physician-hospital affiliation has accelerated. In just the last five years, many health systems have doubled or tripled the size of their physician enterprises, investing billions and welcoming thousands of physicians into partnership.
If your organization is striving to unlock the full value of integration, start with these five diagnostic questions:
1. Are you truly planning together—or just coordinating at the end?
The next time you sit in a strategic planning session, notice who’s at the table. Are your hospital and medical group leaders involved from day one, or do they build separate plans and “coordinate” late in the game?
Look for:
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Joint planning—hospital AND medical group at the table from day one
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Unified capital allocation decisions
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Transparent and market-based transfer pricing between entities (not black box accounting)
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Clear decision-making where authority and accountability actually align
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Shared accountability for system performance
Red flag: When the hospital and physician enterprise work independently, then try to align at the end—or present separate plans to the board.
2. How much capital have you deployed without strategic coordination?
Over the past five years, some of your largest capital investments have been acquiring practices, building facilities, and expanding services. But did those investments follow a coordinated strategy, or did they happen entity by entity?
Ask yourself:
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Did practice acquisitions align with your overall health system strategy?
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Does your ambulatory footprint expansion fit your strategic investment philosophy? Is it balanced with your other investments?
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Does physician enterprise growth support systemwide access and population health?
Many organizations continue to deploy capital in silos, without an adequate focus on maximizing system value.
3. What percentage of your readmissions stems from poor care transitions?
You track readmissions carefully. But have you analyzed how many result from failed care coordination between hospital discharge and ambulatory follow-up?
Look at:
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Post-discharge follow-up rates within 7, 14, and 30 days (with faster follow-up for high-risk populations like heart failure, uncontrolled diabetes, or patients on complex medication regimens)
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Communication protocols between your inpatient and outpatient teams
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Who’s actually accountable for care transition outcomes
Systems that coordinate care transitions effectively can reduce readmissions meaningfully. For a 500-bed hospital, that can mean millions in avoided costs and better patient outcomes. Care coordination is a true test of integration.
4. Are your physician and provider compensation plans market-driven, strategically aligned, and transparent?
This is often the hardest question, but it’s worth an honest appraisal.
Ask yourself:
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Do you have multiple compensation models across specialties and sites?
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Are acquired practices still on their legacy models years after acquisition?
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Can you explain why two primary care physicians 10 miles apart are compensated differently for the same work?
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Does your compensation structure reward system goals such as access and productivity—or create competing incentives?
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Are you achieving these goals while maintaining physician wellbeing?
The integration test: Compensation should be transparent, flexible for market conditions, and aligned to system goals. If your physicians don’t understand how their compensation plans work and connect to access, productivity, and sustainability, you have work to do.
What top performers do: They have consolidated from dozens of different models down to a few standardized frameworks—typically organized around how physicians work (production-based, salary-based, shift-based). They make investment per physician explicit and tie it directly to strategic value: expanding access, improving productivity, serving underserved populations. They also invest in performance management—clearly communicating and managing to industry standard work expectations. They have explicit expectations around productivity levels, call obligations, and other responsibilities. Without those clear expectations, maintaining a market-based compensation plan becomes nearly impossible.
5. Is technology deployed systematically across your workforce—or siloed by entity?
Most systems have invested heavily in AI tools, clinical systems, and operational platforms. The key question is whether they’re deployed systematically to enable productivity for the entire workforce.
Ask:
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Do you have unified AI governance determining what gets deployed systemwide?
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Are AI and automation tools available to all clinicians and staff—or just select departments?
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Do technology decisions maximize workforce productivity across the entire system?
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Does data flow seamlessly across hospital, physician enterprise, and post-acute settings?
Each entity implementing its own technology creates expensive silos instead of care enablement. Without systematic deployment and unified governance, organizations automate disconnection, rather than enabling the workforce to deliver better care more efficiently.
What works: Systems with unified AI governance deploy tools consistently, ensure workforce adoption through standardized training, and measure productivity gains across all entities—not just pilot projects in individual departments.
The Reality Check
If three or more of these questions are raising a red flag, you are not alone. Many systems struggle with the most common integration challenges: aligning on unified planning, strategic capital coordination, building stronger connections across care transitions, reducing compensation complexity, and eliminating technology silos.
Yet, these areas are also where the real opportunity lies. Health systems have already invested significantly in the physician enterprise. The next step is operating as a unified system, not a collection of separate entities.
Which of these questions resonates most with your organization? Where are you seeing progress, and where are the ongoing challenges? I’d welcome hearing your perspectives—comment below or reach out directly to continue the conversation.
Jerry Penso, MD, MBA, is president and CEO at AMGA.
Originally published on LinkedIn.
