Transitioning Aggregated Physician Practices to High-Performing Clinical Enterprise

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Lilian West
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1 Transitioning Aggregated Physician Practices to High-Performing Clinical Enterprise Alan S. Kaplan MD SVP/Chief Clinical Officer, Iowa Health System President/CEO, Iowa Health Physicians & Clinics Objectives Gain historical perspective regarding physician employment and how it relates to the current state Learn an approach to a creating a unified, strategically and operationally aligned medical group Learn how to merge cultures by creating an intentional culture Understand the governance and infrastructure requirements to become a high performing medical group Identify difficulties you are likely to encounter 2 1

2 The Fall of Private Practice Maximum Productivity Reimbursement Breaking Point Cost Episodes of Care 3 Narrow Revenue Streams in Peril Maximum Productivity Reimbursement Cost Episodes of Care 4 2

3 Physician Employment on the Rise? % Employed Physicians Source: Merritt Hawkins & Associates. 5 Rising Health System Liability Reimbursement MGMA Average investment per physician = $174,000 Increasing Expenses Hospital competition Market compensation Administration EHR Facilities Operating Loss per Physician Cost to Provide Episode of Care Episodes of Care 6 3

4 Aggregation Not Strategic Growth Goal: referrals Defensive acquisitions Hiring to location & specialty as opposed to culture and performance Unappreciated financial value Less than optimal leadership and infrastructure Second class treatment 7 Common Outcome Transition from independent practitioners to autonomous employees Lack of responsibility & accountability to parent organization (WIIFM) Employed physicians do not function like a team Referral patterns do not meet expectations Demanding & difficult to manage 8 4

5 Changing External Environment ACO = accountable care organization. 9 Physician Alignment Imperative Between 20% and 30% of all Wellness US health care is pure waste. Disease management Care coordination Quality and safety improvement (33 CMS ACO metrics) Clinical information systems and real-time analytics Financial sustainability CMS = Center for Medicare & Medicaid Services. Don Berwick Former CMS Administrator 10 5

6 Good Advice We can't solve problems by using the same kind of thinking we used when we created them. Albert Einstein 11 9 Regions in Iowa & Illinois 27 Hospitals 800+ Employed Physicians Home Health ACO with 220,000 lives Iowa Health System 12 6

7 Physician Empowerment Iowa Health System Strategic Plan 2010 Become a physician-driven organization that attracts physicians, strengthens alignment and improves patient-centered care Endorsed by system hospital CEOs and adopted by IHS board of directors 13 Physician Leadership Academy Formal online application Selection criteria Physician-friendly format Online courses Onsite courses CME credit (114 hours) Graduate degree credit Formal graduation ceremony Post-Graduation talent management program

8 Employed Medical Groups 15 Strategic and Operational Alignment 16 8

9 A Two Year Journey Year One Gain consensus of asset owners Year Two Engage physicians in the planning process Develop compensation plans Gain consensus of practicing physicians 17 Beyond the Vision & Burning Platform Employed groups ranged from a few individuals to over 300 providers Very little optimism due to disparity of group cultures & compensation plans Representatives from all groups and regions came together in a senate model to create a new organization referred to as 18 9

10 The Creation of Practicing physicians were empowered to create a new organization from a blank piece of paper Process facilitated by system CMO & outside consultant Iterative process between physician steering committee, participating medical groups and the senior affiliate regions 19 Physicians are People Too Maslow s Hierarchy (Governance) (Compensation) 20 10

11 Physicians Engaged in Compensation Plan Design Primary care compensation 12% at risk for performance: quality, patient satisfaction and financial Specialist compensation Multiple contractual agreements in place Specialist compensation standards tackled in first year post merger 7% at risk for performance 21 as a Senior Affiliate Parent IHS Board approves as a senior affiliate Equal partner with the regional senior affiliates representation on the parent IHS Board IHS Iowa Health Des Moines St Luke s Healthcare Allen Health Systems, Inc Trinity Health System Trinity Health Systems, Inc St Luke s Health System Finley Tri-States Health Group, Inc Division Division Division Division Division Division Division 22 11

12 Corporate Structure Nonprofit corporation with 11 member board 6 community members 1 regional administrative CEO 4 employed physicians (officers of the board) Authority delegated to Operating Committee Led by physician CEO (not actively practicing) 3 practicing physicians from each region 23 Partnership Structure CEO IDS CEO Senior Administrative Team VP Medical Director VP Clinic Operations Physician Leadership Council Dual Hire Dual Reporting Unilateral Termination 24 12

13 Becomes Reality January 1, 2012 Approximately 540 providers by end of year one Letters of Intent 350 providers to join over two years Name launch mid-april 2013 Trademark agreement to accelerate alignment 25 Creating an Intentional Culture Culture Retreat January 19 & 20, 2012 FINDING OUR TRUE NORTH 26 13

14 Best Outcome Every Patient Every Time Period! Values Patients First Integrity Pursuit of Excellence Partnership Community Stewardship 27 First Year Quality Improvement Embedded 49 quality metrics in compensation plan 22% Overall improvement 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Mammograms Performed Breast Cancer Screening 52.75% 55.67% 57.91% 59.57% 60.68% 58.92% 56.57% 47.73% 49.49% 20.11% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Well Child Visits Well Child Visits 0-15 Months 54% 49% 44% 37% 31% 26% 20% 62% 65% 67% Goal: 57% 28 14

15 Lessons Learned Board & CEO support is imperative Invest in leadership education A compelling vision only gets the physicians to the table then the work begins! Empower your physicians Consider a senate leadership model Create an intentional culture 29 15

Strengthen Financial Performance: Start with Lab Outreach Gary Palgon, VP Healthcare Solutions Naveen Sarabu, Director Product Management

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