ACMPE Paper, October By: Lance C. Goudzwaard, MSHA, FACMPE

Transcription

1 ACMPE Paper, October 2006 By: Lance C. Goudzwaard, MSHA, FACMPE This case study manuscript is submitted in partial fulfillment of the requirements for election to Fellow status in the American College of Medical Practice Executives This manuscript was prepared as part of meeting various recognition criteria as set forth and may be changed from time to time by the American College of the Medical Practice Executives (ACMPE). The experiences, thought, ideas and opinions set forth are solely those of the author. They do not reflect any position on the part of ACMPE with respect to their completeness, correctness or accuracy of the paper s contents, for example, on points of law or accountancy in effect at the time of or subsequent to the date of paper completion Medical Group Management Association. All Rights Reserved.

2 MARRIED PARTNERS WHEN DIVORCE COMES INTO PLAY May 26, 2006 This Case Study is being submitted in partial fulfillment of the requirements for election to Fellow status in the American College of Medical Practice Executives. 1

3 MARRIED PARTNERS WHEN DIVORCE COMES INTO PLAY STATEMENT OF THE PROBLEM Managing a 12 provider medical practice where two of the senior partners are married is challenging. When the married partners get divorced, both wishing to stay with the organization, the challenge becomes a daunting task. The senior leadership believes it is only a matter of time before the problems that resulted in marital discord carryover to the workplace. Therefore, the choices become (1) termination of one or both partners; or (2) develop a plan to protect the organization ensuring a continued healthy and positive practice environment, and build a scenario whereby these partners may co-exist to the satisfaction of all involved. RISK FACTORS When evaluating this situation, several key risk factors were discussed including (1) the popularity of these individuals, (2) financial impact to the practice, (3) impact on staff morale, (4) impact on patient satisfaction, and (5) impact on practice leadership. The most significant concern of the organization was the popularity of these individuals with the referral base. With both providers so entrenched in the market, the loss of either individual would be a substantial detriment to the practice. In addition to this primary concern, several secondary concerns were discussed. They included the financial impact 2

4 to the practice, and the potential for heated conflict and resultant carryover to staff morale and patient satisfaction. The anticipated financial impact on the practice due to the divorce was not inconsequential to the groups approach to this situation. Although impossible to assess in advance, the group was prepared for costs to the practice including attorney fees, lost administrative and staff time, and other costs that could not be predetermined. Due to the nature of the groups productivity based compensation system, the bulk of these costs would be incurred by the divorcees themselves. The final concern was resolved by the divorcees themselves. At the time the divorce was announced, the divorcees were not currently holding key leadership roles but were President Elect and Treasurer Elect. Each individual voluntarily withdrew from these positions, and the group asked the board members currently serving in those positions to continue serving for an additional year. DATA GATHERING The Board of Directors charged the CEO with contacting the corporate attorney to discuss the situation and have him help assess potential pitfalls. The CEO also held discrete discussions with his colleagues in the industry, in the hopes that someone who had been down this path may have advice to offer. 3

5 The most fruitful information was obtained via a meeting with the senior leadership to specifically discuss the divorce with the two individuals. At this meeting the leaders were able to ascertain the divorcee s willingness to continue to work in this environment, whereby each individual divorcee made it clear that they intended to make this situation work. Following this meeting the senior leadership met to discuss the situation, and believing that this arrangement had a high likelihood of failure, started to generate a list of alternatives. ALTERNATIVES CONSIDERED After information from multiple sources was collected and discussed, the group felt it had three basic options: (1) remove both partners, (2) remove one partner in favor of the other, or (3) allow both individuals to remain with the organization. The removal of both partners was briefly discussed and quickly removed from the list of options. The practice was in no position to operate without two highly productive providers. Removing one partner in favor of the other received some discussion. Most of this discussion involved who was at fault, who brought more value, who brought more risk, and in what ways the practice would be harmed if the group was to take no action and the perceived inevitable blow up occurred. The group concluded that neither individual had done anything to date that would merit termination. The final option then captured a vast majority of the meeting. The major concern was the group s anticipation of an emotional blowup resulting in the departure of one or both individuals. DECISION AND IMPLEMENTATION 4

6 The group agreed to sit back and allow the divorcees to proceed through the steps of the divorce including separation, custody battle, and financial settlement, which lasted about 22 months. There would be no interference from the practice, or action against either partner at this time. This decision was contingent on the divorcee s agreement to insulate the practice from the impact of the divorce, and resultant legal battle. The group worked under the assumption that if the divorcing partners were successful in maintaining a healthy separation between personal and work issues, no action would be taken. The Board of Directors asked the CEO and President to handle the day-to-day management of this situation, and to report back if changes to the plan became necessary. The CEO was directed to evaluate and recommend amendments to the employment contracts in the event of an emotional departure by one or both individuals. Since the senior leadership felt the departure of one or both partners was inevitable, the contracts were amended to include incentives for providing proper notice upon departure. The primary amendment changed the termination notification from three months to twelve months, and encouraged providers to comply by delaying the payment of buyout monies by two months for every one month short of the twelve month requirement. This amendment was made to the practice employment agreement and to the operating agreement for the group s Ambulatory Surgery Center. One justification for these changes was that the organization was making significant financial investments in a second ambulatory surgery center, and a short notice departure of any provider could threaten the viability of this new entity in its first years of operation. A driving force behind the preparation for these changes was that senior leadership was of the opinion 5

7 that an emotional and therefore unprofessional departure was a real possibility. It is important to note that this amendment was adopted by all providers. The CEO and President counseled the divorced partners as to the expectations that must be upheld in order to maintain employment with the practice. In this meeting it was made clear that they must be successful in maintaining a healthy separation between personal and work issues to maintain employment with the practice. Their ability to continue to communicate professionally regarding patient care was emphasized. This meeting also provided each individual with the opportunity to voice concerns about these expectations. CEO and Administrative staff counseled employees on how to handle conflict that might arise in the work place. Staff was informed that the physicians were divorcing, had planned to stay with the practice, and had made a commitment to insulate the practice and staff from this conflict. Staff was provided an opportunity to share their concerns, and to ask questions. Staff was also given several scenarios they might encounter, and coached as to the proper response to each. The primary message conveyed to the staff was to stay out of any conflict that might arise in the workplace, and follow proper reporting procedures (use of an incident report) if improper behavior were to occur. It was made very clear that the CEO and President would handle these situations according to standard operating procedure for incident reports. LESSONS LEARNED 6

8 As a positive result of this situation, several problems in the practice were identified and rectified. Although this group was aware of many of the problems a small to medium sized practice can experience when employing married physicians, the threats that became apparent due to the divorce were eye opening. Employment contracts were identified as too weak to provide comfort in a situation of this nature. Additionally, the financial status of the practice and cash flow were at risk if any two providers would be separated from the organization without notice. Any administrator facing this type of situation should be prepared to spend approximately 3-5 hours per week dealing with related issues including correspondence with the divorce attorneys, counseling staff, and most specifically time with the divorcees themselves. The process of the divorce is very time consuming for the divorcees, and will draw their time and attention away from their work. To prevent this from significantly impacting the practice, the group should establish a policy clearly stating that any personal meetings (often scheduled on short notice) should not be allowed to result in the rescheduling of patient appointments. The medical director should be assigned the responsibility of monitoring the clinical performance of the divorcees. The group identified several key items viewed as both long and short term solutions to this situation, or other situations of this nature that might result in similar impact to the practice. This practice made a decision to avoid hiring married couples in the future. Employment contracts were amended to include language that incentivises individuals to provide proper notice when invoking the termination clause in the contract. The group 7

9 also made an effort to prepare for what is perceived as the inevitable departure of one or both partners by increasing liquidity and staying active on the recruiting front. The result of these decisions and resultant plan of action has been positive. At this time, the divorced partners are coexisting in a relatively harmonious manner. The organization is prepared for a possible emotional exit by one or both divorcees, and anticipates this result within the next 12 months. The organization accepts a degree of dysfunction that is inherent in this situation, and adjusts to the degree possible. RECOMMENDATIONS Although the outcome of this situation has been largely positive, the group would recommend that if a practice is considering the employment of married physicians, that practice should seriously consider the consequences of how the end of that relationship could impact the group. If a small to medium sized practice currently employs married physicians, the recommended plan of action is: 1.) Review employment agreements, ascertain the strength of the termination notice clause 2.) Proactive marital counseling 3.) An analysis of the financial viability of the organization if two partners were to depart on short notice If a small to medium sized practice employs married physician who are in the process of divorce, the recommended plan of action is: 8

10 1.) Meet with the divorcees to ascertain if one or both intend to stay with practice 2.) Assess risk of keeping these individuals with the practice, verses termination of one or both. 3.) Assess cost related to the divorce and decide how these costs should be paid 4.) Establish clear expectations for the divorcees, including consequences for failure to meet expectations 5.) Review employment agreements, make sure contracts provide the ability to carryout the groups plan of action 6.) Select key individual(s) to handle day to day issues related to the divorce 7.) Effectively communicate with staff including any necessary review of related policy and procedure 8.) And prepare the practice psychologically for the impact of a possible emotional departure of one or both divorcees. 9