Building a Strategic Vision for Your Employed Physician Network

Building a Strategic Vision for Your Employed Physician Network June 22, 2017 1

Dr. McWilliams - BIO Terrence R. McWilliams, MD, MSJ, FAAFP Chief Clinical Consultant tmcwilliams@hsgadvisors.com (502) 614-4292 Dr. McWilliams joined HSG in November 2013after devoting a decade as the Vice President of Medical Affairs and Chief Medical Officer at Newport Hospital, an acute care community hospital within a larger Rhode Island academic health system. As CMO, he supervised the Medical Staff Services Office and was responsible for quality of care/ patient safety/risk management, clinical information systems, medical staff services, physician recruitment and clinical service line development. His involvement at the system level included creating system-wide Medical Staff Bylaws, spearheading various clinical IT projects, and contributing to broad-based performance improvement efforts. Terry joined Newport Hospital when he retired from the US Navy after more than 20 years as a family physician and clinical administrator in a variety of practice environments, including leading multi-specialty clinical operations and physician-hospital alignment. Terry received his medical degree from the University of Pittsburgh School of Medicine and a Master of Science in Jurisprudence (MSJ) in Hospital and Health Law from Seton Hall University School of Law. He has since obtained additional expertise in NCQA PCMH and PCSP content and Population Health Management. 2

Objectives Understand the progressive maturation of employed physician networks necessary to truly achieve value Comprehend how establishing a common vision for the group can lay the foundation for future employed network success Recognize the indispensable role of physician leadership for successful network function 3

Content Section Content Page 1 Network Maturation Process 4 2 Vision: Foundation for Strategy 11 3 Key Elements for Organizational Success 14 Physician Leadership and Engagement 5 Case Study 18 4

Physician Network Growth and Maturation Phases Operational Chaos Strategic Focus Growth Mode Value Phase Novice High- Performing 5

Characteristics of Maturation Phases Novice o Just entering physician employment realm often as a reactive measure o No growth strategy o No dedicated management infrastructure o Best described as independent physicians who share tax ID number Growth Mode o Beginning to aggregate in size o Some proactive physician employment based on perceptions of strategic need o Network remains loosely managed, usually overseen by hospital execs juggling many other responsibilities Operational Chaos o Network growth outstrips management infrastructure capabilities o Experience increasing practice subsidies (losses) o Hospital leadership senses need to control the group s growth and limit employment offers due to mounting financial issues 6

Characteristics of Maturation Phases Strategic Focus o Network operations better aligned as focus shifts to strategy o Physician leadership a crucial network competency o Consider consolidations and culling less effective and efficient providers from network (liabilities in Value Phase) o Contemplate foundation and framework for population health management Value Phase o Network more integrated; learning how to produce value o Employed network leading the charge to improve quality and serving as the core physician network for managed care offerings and controlling risk High Performing o Stable, strategic growth; Stable, standardized operations o Defined, homogeneous culture o Effectively manage populations and risk o Epitomizes the value equation o Provider of choice in the market 7

Goal: Intervene and Accelerate Progress Operational Chaos Strategic Focus Growth Mode Value Phase Improve Performance & Increase Strategic Value Novice High- Performing 8

Physician Network Performance Acceleration Operational Chaos Strategic Focus Growth Mode Value Phase Novice High- Performing Physician Alignment Strategy Management Infrastructure Network Performance Improvement Shared Vision & Strategy ACO & Risk Contracting Optimize Acquisition and FMVs Physician Leadership Referral Management Bundle Payments 9

Physician Network Growth and Maturation Phases Operational Chaos Strategic Focus Growth Value Novice High Performing Networks across the country span the bell curve, but the vast majority are in one of these three stages. 10

Physician Network Performance Acceleration Operational Chaos Strategic Focus Growth Mode Value Phase Novice High- Performing Physician Alignment Strategy Management Infrastructure Network Performance Improvement Shared Vision & Strategy ACO & Risk Contracting Optimize Acquisition and FMVs Physician Leadership Referral Management Bundle Payments 11

Shared Vision and Strategies Goal Develop a common vision within the group that is shared and embraced by all group members A strong, shared vision developed by clinician leaders will generate a strong group culture aligned with organizational goals and objectives o A key to enterprise success 12

Shared Vision and Strategies Description Lengthy, descriptive narrative that clearly articulates how the group will ideally look and act in 10-15 years o Not a short, pithy Vision Statement to memorize and recite Defines an idealistic future state in enough detail so all staff members can understand and work toward it 13

Shared Vision and Strategies Utilization Develop strategies to achieve the vision elements and subelements Prioritize strategies to implement Create individual action plans for prioritized strategies o Including financial impact, model Routinely monitor progress Regularly re-evaluate pertinence o Not carved in stone Should be reviewed regularly to ensure it remains pertinent for evolving circumstances 14

Vision Elements Center on the key elements for organizational success Strategy o The cornerstone for a high-performing employed physician network, strategy defines the network s vision, sets key short- and long-term objectives for the group and identifies the primary care vs. specialist mix needed to capture volume and leverage better rates with payers. Infrastructure o o Does the group have a vision and a strategy for accomplishing it? The network s infrastructure operational leadership plus IT, HR, accounting and finance, revenue cycle, and purchasing should be standardized across all practices. Network management is an essential element. A weak management team, or one spread too thin, will not be able to achieve the desired results. Management infrastructure appropriate? Support adequate? Operations under control? 15

Vision Elements Center on the key elements for organizational success Physician Leadership Quality o o Organizations must develop and cultivate key physician leaders who understand clinical, market and economic issues; are committed to improving quality; and are willing to model and be the drivers of the network s culture, including holding peers accountable. Clinical leadership present? Being developed? Incorporated into formal organizational structure? Creating a network built on quality is the lynchpin of value-based reimbursement. Defined customer service standards and quality metrics must be in place that show payers and the public you can produce results while continually improving the results and being nimble enough to respond to changing requirements as the market evolves. Goal to provide better care to patients More than just clinical quality Prove to everyone that you can provide value 16

Vision Elements (continued) Center on the key elements for organizational success (continued) Culture o o The mortar that holds the employed physician group together. To be successful, your group must share a common vision and a culture that defines shared expectations and behavioral norms. Prerequisite for Brand development Consistent culture, philosophies? Multi-specialty group mentality? Brand / Identity o The brand of the employed physician network must align with, complement, and support the system or hospital brand. It translates into hiring the right physicians, engaging the community through effective marketing, and conducting patient satisfaction surveys. Consistent across practices? With hospital brand? 17

Vision Elements (continued) Center on the key elements for organizational success (continued) Financial Sustainability o Sustainable networks regularly perform internal assessments to identify opportunities for improvement and use dashboards to monitor key performance indicators days in AR, net loss per physician, charge capture, gross and net collections percent, etc. Effective revenue cycle management is key. Revenue cycle being managed well? Cost management protocols in place? Aligned Compensation o o Effective compensation plans tie total compensation to performance in terms of both productivity and quality, safety, patient experience, and operational incentives Incentives must be understandable and present clear, measurable metrics that further the organization s goals and objectives; are standardized across the employed network; and promote a shared group culture. Compensation agreements driving success? Evolving towards value-based metrics? 18

Case Study: Medical Group 1 Physician Partners 146 Physicians 19 Specialties 6 Counties 110 120 137 131 66 74 52 52 12 24 16 16 16 16 17 17 17 16 15 15 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 19

Case Study: Medical Group 1 Much of growth through acquisition Management infrastructure in place felt strain related to pace of growth Chartered a committee of physician leaders to enhance bidirectional communication in 2015 o No defined leadership expectations outside of communication chain Presented Group s quality, patient satisfaction, and financial data to committee o Disconnect regarding action items / expectations of committee members Group s practices functioning in semi-autonomous fashion Processes promoting a common identity initiated Administrative leadership sought to catalyze process 20

Case Study: Medical Group 1 Undertook project mid-2016 to Define a vision and potential strategies that will best position the Medical Group for continued success as the healthcare environment evolves Project Goals o Assist the Medical Group leadership to Prioritize strategic objectives Enhance collaborative group function Achieve projected outcomes Develop Physician Network Vision Statement including Network Culture elements Determine potential strategies through which Vision achieved Enhance Network Infrastructure Cultivate Physician Leadership 21

Case Study: Medical Group 1 Project Overview o Conducted interviews to determine perceptions of the current status and future course Physicians (15), Nurse Practitioner (1), Administration (4) o Selected members completed formal assessment to try to objectify perceptions 67 elements targeting best practices o Engaged Physician Committee to Review/comment on background information Develop a draft vision statement Initiate cultural elements discussion 22

Case Study: Medical Group 1 Project Timeline Meeting Topic/Milestone Details Kick-Off Meeting Introduce Project Introductions and overview of HSG process. Introduce Key Elements for Network Success Steering Meeting 1 Steering Meeting 2 Steering Meeting 3 Steering Meeting 4 Data Review Introduce Vision Elements Draft Vision Statement Vision Statement Culture Potential Strategies Review Project Objectives and revise timeline Provide overview of industry trends Review data/analysis Discuss interview findings Introduce initial Vision elements Introduce draft Vision Statement Revise based on feedback Review revised Vision Statement Discuss culture impressions Introduce potential strategies based on Vision Statement Review proposed project timeline revisions Present Case Studies Review revised Vision Statement Discuss next steps 23

Case Study: Medical Group 1 Project Timeline Meeting Topic/Milestone Details Steering Meeting 5 Review Leadership Council Draft Charter Membership and selection process Membership expectations Steering Meeting 6 Potential Strategies Review potential strategies to attain vision Steering Meeting 7 Group Meeting Finalize potential strategies; Develop group meeting logistics Review Steering Committee work with entire group Review revised Physician Leadership Council documents Analyze feedback from Strategy Retreat Finalize draft list of potential strategies Determine logistics for All-Provider Meeting AMG and Committee Background Review project background Present industry trends Introduce draft Vision Statement and associated strategies Introduce Physician Leadership Council creation 24

Case Study: Medical Group 1 Developed Vision Statement with nine elements o Patient Experience: MG1 will continue to place the patient at the center of the decision-making process. o Multi-Specialty Group: MG1 will function as a multi-specialty group with shared processes, mutual respect, and collaborative collective culture. o Leadership: MG1 s success will be driven by active physician leadership. o Management Infrastructure: MG1 will be supported by an infrastructure designed for physician practice success. o Clinical Data: MG1 clinicians will seamlessly access comprehensive clinical data and decision support at the point of care. o Quality Plan: MG1 will build a comprehensive quality and performance improvement plan to actively monitor and improve rendered services. 25

Case Study: Medical Group 1 Developed Vision Statement with nine elements (continued) o Brand: MG1 will be branded as the region s provider of choice associated with the region s health system of choice. o Strategic Focus: MG1 will strategically anticipate and respond to the ever changing healthcare industry and regional market. o Growth: MG1 will grow to meet the needs of the residents, collective communities, and associated employers in the region. 26

Case Study: Medical Group 1 Developed potential strategies to achieve each of the vision elements and sub-elements Prioritized potential strategies and developed strategic focus for 2018 27

Case Study: Medical Group 1 Actual process deviated from proposed as Physician Committee revised in midst of process o Revised Charter to include specific leadership functions o Modified membership Added additional primary member to more closely parallel group demographics Added Advanced Practice Professional representative o Allowed the Committee to be more comfortable owning and presenting the vision statement and strategies to the group Enhanced their standing in their minds Concomitant processes in group based on identified needs o Pursued MG1 COO on interim basis while recruiting for full time position (now filled) o Pursued operational assessment and revised revenue cycle management operations 28

Case Study: Medical Group 1 Outcomes to date o Physician leaders very engaged in Leadership Council work and actively participating in the group decision-making process o Created Leadership Council Subcommittees devoted to conducting the detailed work in Quality and Patient Experience Clinical Informatics Finance and Operations o Injected desired physician involvement with operational issues including policy and procedure development and standardization o Addressing issues identified with the group s management infrastructure o Enhanced revenue cycle function increased patient revenue capture and improved MG1 financial status o Optimistic about developing more cohesive group culture 29

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About HSG Who We Are HSG builds high-performing physician networks so health systems can address complex changes with confidence. From boosting market power and financial strength to preparing for value-based care, we can help you define your strategy, implement that strategy, and manage your physician network short or long-term. We guarantee results and deliver the greatest value as a trusted member of your team. Our Areas of Expertise Physician Strategy Physician Network Optimization Value-Based Care Physician Alignment Strategy Strategic Plans with Physician Focus Employed Group Strategy Service Line Strategy Service Line Co-Management Physician Manpower Plans Affiliation Strategy Network Management & Advisory Interim Management Network Performance Improvement Creating Shared Vision Provider Productivity Systems Network Revenue Cycle Physician Compensation Planning Practice Acquisitions Fair Market Value Opinions Executive Recruiting Referral Capture Improvement Practice Transformation ACO Development ACO Optimization Clinical Integration Strategy Direct Contracting 31