Sarah O'Hara on July 26, 2012 |
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Topics: Clinical Integration, Hospital-Physician Alignment, Physician Issues, Employment
Here’s a story we’ve heard a lot lately. A large health system recently launched a clinical integration (CI) network to engage independent physicians in performance improvement. At the same time, this system has responded to sharp growth in its employed physician base by working to create an integrated, high-performance medical group. The net result? The emergence within the same organization of two physician entities with related yet distinct missions—and the challenge of figuring out how to manage the relationship between them.
As many health systems pursue both CI and physician employment, stories like this are playing out all over the country. In theory, having both a CI network and an integrated medical group provides an embarrassment of riches—two vibrant physician organizations that can work hand in hand to improve system performance. But in practice, this ideal can seem elusive as systems face physician confusion about who’s in charge of what, potential redundancies in strategic decision-making, or outright rivalry.
It is worth noting that most health system-affiliated CI networks include the system’s employed physicians within their membership ranks. But at the same time, many nascent employed medical groups are pursuing their own efforts to create a culture of integration, build physician governance, develop meaningful performance metrics, and deploy care coordination infrastructure. With the CI network facing a similar mandate, the risk of inconsistency, overlap, and general confusion is hard to ignore.
As we research “next-generation” clinical integration, we’ve been asking organizations with mature CI programs and high-performing employed medical groups how they have worked to avoid this problem. And while nobody seems to have a perfect solution, we've seen a few strategies for enhancing inter-network coordination emerge:
- Define key areas of overlap
- Establish strong communication
- Leverage existing resources
- Avoid even the hint of favoritism
Define key areas of overlap
First, recognize where the greatest sources of overlap between the CI network and employed group are likely to be. Not all responsibilities are shared. The medical group will need to retain ownership over key aspects of the employment relationship, such as hiring physicians, defining the compensation model, and ultimately ensuring practice solvency. The CI network, meanwhile, will need to own the relationship with independent physicians—recruiting them into the program, managing the administration of joint payer contracts that include independent providers, and ensuring that the network operates legally with respect to antitrust laws.
Beyond these areas, however, a broad spectrum of responsibilities could be of interest to both physician entities, including:
- Defining performance metrics and care standards
- Selecting preferred vendors for electronic medical records, disease registries, and other information systems
- Housing care management resources, such as case managers
- Monitoring physician performance data and identifying improvement opportunities
- Defining referral criteria and service standards
- Negotiating payer contracts and creating incentive distribution models
- Providing a source for physician leadership on the inpatient side (e.g., participation in hospital strategic planning or service line co-management)
As CI networks become more sophisticated, this list may also expand. For example, while many high-performance medical groups try to help employed practices improve the efficiency of day-to-day administrative operations—nurse staffing, appointment scheduling, etc.—many CI networks have historically regarded practice management as outside their purview. But as the network’s goals shift beyond basic quality improvement to include things like enhanced patient access or medical home implementation, the need to define common operational standards may increase.
Providing a further potential complication, note that some of the responsibilities listed above could also fall within the purview of the inpatient medical staff organization. At most systems we’ve examined, the medical staff organization takes a back seat when it comes to systematic performance improvement and physician engagement, focusing instead on traditional responsibilities such as inpatient credentialing. As a result, this blog post will concentrate just on the relationship between the CI network and employed medical group. That said, many of the relationship-management strategies discussed in this post would also apply if your system has a strong traditional medical staff leadership structure and is trying to manage relationships between that group and a CI network or employed medical group.
Establish strong communication
The second step is to develop full and open communication between the CI network and employed medical group. At a minimum, advanced systems say, leadership should cross-pollinate between the two entities, with board members of the employed medical group serving as leaders within the CI network. This strategy ensures that the governing board of each entity knows what the other is doing and can coordinate as needed around strategic decision-making.
Regular communication should also occur among the executive directors of each entity. One health system in the southwest took this strategy a step further, asking the leader of its longstanding employed medical group to move into a new position as head of the nascent CI network. While a new leader has been appointed over the medical group, the fact that the former leader still maintains strong connections on the medical group side has streamlined coordination among the two entities.
Likewise, if the heads of the CI network and employed medical group report to different executives within the health system, leaders should ensure that those individuals are also in regular communication about the activities of each physician entity.
Finally, communication among rank-and-file physicians can also improve coordination. Take the case of one large midwestern health system that recently launched a CI network after many years spent developing a robust employed medical group. For employed physicians, who are justifiably proud of their strong culture and performance outcomes, the greatest concern about CI was the possibility that this work would be diluted by independent physicians. But as the system has worked to foster relationships and to demonstrate the benefits of CI—such as access to a larger referral network and more patient data—employed physicians have become eager to work with their independent counterparts on tackling difficult clinical challenges, such as reducing emergency room utilization.
Leverage existing resources
As in the case above, one physician entity sometimes has a more robust infrastructure for physician performance improvement than the other. Often, although not always, the stronger party here is the medical group, since systems may find it easier—and more critical from the perspective of generating returns on practice acquisition investments—to extend performance resources to employed physicians.
As these systems bridge the gap between CI and employment, they take pains not to reinvent the wheel, avoiding redundancy by leveraging the infrastructure and momentum created by one entity to support the other.
For example, one system we spoke with is working to extend the practice management resources built for its strong employed group to its nascent CI network through a management services organization (MSO)-type structure. Independents would pay a fee based on fair market value for access to services, including:
- Revenue cycle management
- Procurement
- Human resources
- Credentialing
- Decision support
- Support for patient-centered medical home development
Other systems are similarly leveraging quality improvement teams, case management staff and other care coordination resources built for the employed medical group to support the broader efforts of the CI network.
Avoid even the hint of favoritism
Perhaps the most challenging aspect of the medical group-CI network relationship to manage, however, is the sense among both private-practice and employed physicians that the other group is treated more favorably.
Independents, for example, may feel that employed physicians receive preferential treatment in terms of practice support or ability to influence system decision-making. Shared governance can be crucial to ameliorating this concern. At one system where employed physicians represent about 70% of the CI network, leaders have structured network governance to reserve 50% of the seats for independent physicians and appointed an independent physician as network CEO. Leaders cite these steps as part of the reason why the network has attracted several hundred independent physicians to participate.
Yet, systems also need to ensure that they don’t go so far toward placating independents that they leave employed physicians feeling marginalized. Even if the medical group is better capitalized, it may not be on equal footing politically with the CI network. Sometimes, this discrepancy occurs simply because the CI network is much larger, but in other cases, the system may appear to hold employed physicians to a different standard than independents or to take their loyalty for granted. This can breed resentment and malaise within the employed medical group.
At one southern hospital, for example, medical group leaders cite the appearance of a double standard: system executives laud independent physicians for their work on CI initiatives while criticizing employed physicians for the ongoing need to “subsidize” their practices. The system also requires that any bonuses earned by employed physicians through CI contracts go toward medical group operations in order to reduce this subsidy, rather than directly to individual physicians.
Medical group leaders note that this practice—which they say fails to recognize the significant role played by employed physicians in helping the CI network generate strong quality results, providing much of the system’s call coverage, and shouldering a heavy load of underinsured patients—has led to a feeling among employed physicians that their contribution to the system is undervalued. Moreover, it has created anger toward independents that makes coordination more difficult.
Keep the ends in mind
At the end of the day, advanced systems say that none of the above tactics is a complete panacea. Though outright rivalries can be ameliorated, some differences or redundancies between the CI network and employed medical group will likely continue to exist. The systems that seem best equipped to manage this situation, however, are those where everyone sees these challenges as just something to work through together, on a day-to-day basis—the necessary trade-off for the opportunity to engage so closely with both private-practice and employed physicians, rather than cause for a major turf war.
For more information
Is tension between the CI network and employed medical group a problem at your institution? If you are interested in sharing your story with us, or have any comments/questions about this subject or any other related to CI, please email me at oharas@advisory.com.
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