Strategic business units are expected to contribute to a system’s overall performance, generate value critical to the organization’s success, and drive market distinction. Failure to recognize the physician enterprise as a strategic business unit and vital component of the integrated clinical enterprise is increasingly untenable for most health systems. Intensifying financial pressure on health systems means that they can no longer sustain underperforming medical groups or accept losses as inevitable or “the cost of doing business.”

It is time to acknowledge the physician enterprise as a critical strategic business unit and major contributor to the health system’s strategic, operational, and financial performance—with resultant expectations for how the physician enterprise is organized, led, and managed.

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