How Physicians and Executives Become Partners
Without effective physician leadership, clinical integration strategies will fail.
Physicians are stepping into leadership roles in hospitals and health systems. Many observers predict health system CEOs in the future will be predominantly physicians. But too many of them are unnecessarily failing.
As a career health system executive, CEO and now strategic advisor to healthcare leaders, I’ve noted a fascinating trend in how physicians actually perform as leaders. I call it the “Tale of Three Tables.”
Health systems are searching for effective physician leaders to fill a litany of institutional roles: chief medical officer, VP of medical affairs, chief clinical informatics officer, chief of clinical operations … the job titles vary. This stems largely from the shift to value-based payment by CMS. The clinical quality and patient safety metrics that now impact the system’s revenue cycle require a new kind of clinical redesign, one that non-clinical executives cannot lead. This illustrates the First Table: Doctors being invited to the executives’ Table to help redesign the health system.
Executives traditionally looked to their medical staff leaders for help. Nearly every health system has experimented with some form of “physician leadership academy” to develop leaders from within the medical staff. These programs meet with varying results, but they represent the Second Table: executives coming to the medical staff’s Table, trying to affect change inside the walls of the hospital through the mechanism of the medical staff.
In the Old World of healthcare, this made sense. The name of the game was to refer patients to specialists who admitted them to the hospital, and the focus was on building service volume. The medical staff was the only forum to affect change.
But in the New World of healthcare, the name of the game is “population health management,” turning the focus to value, teamwork and coordination of care inside and outside the hospital. Medical staffs are ill equipped to manage such care.
This reality has spawned a new concept: the “clinically integrated network” (CIN) of physicians, working in partnership with each other, and often with hospitals. There are 2 methods of integration. One is the employment of physicians by hospitals (i.e., “financial integration”). The other is the creation of a legal structure that enables independent physicians to “clinically-integrate” by creating a new business that assumes and manages financial risk through better-coordinated clinical care.
The important difference is that, unlike the hospital or the medical staff, the CIN is a new joint-ventured business. It is the Third Table, where physician leaders and hospital leaders partner to run a new business in a very interdependent manner.
The people sitting around these 3 Tables are not always aware that the role of a physician leader, and his/her relationship to their hospital executive partners, is very different at each Table. Attending to one’s “Table Manners,” therefore, becomes important!
The First Table: Physician Leadership in a Hospital
Historically, executives managed hospitals, and medical staffs were granted privileges to practice there. This often created a contentious relationship. The New World of healthcare requires a fundamental redesign of the health system, and physician leaders engaged in this work can serve as “translators” between clinical and non-clinical staff to find better clinical ways to serve patients and generate the financial margins the system needs. Chief Medical Officers become the first line of relationship between management and clinicians to set the agenda for advancing clinical quality and patient safety. It works well for the hospital clinicians, such as hospitalists, nursing, and hospital-based physician services. But the autonomy of the independent physician members of the medical staff can militate against the chief medical officer’s efforts to drive change.
The Second Table: Physician Leadership in a Medical Staff
As hospitals become accountable for the outcomes of the care of patients, management usually turns to the medical staff officers for help. Eventually, everyone realizes that a medical staff is not designed to change the clinical and business practices of its members. Its primary purpose is to set and preserve standards of quality for membership on the medical staff. Managing “pedigree” is what gets the attention - - proof of education, training and certification necessary to be privileged to practice in the hospital. Managing “performance” is limited to monitoring quality and patient safety practices and advocating for compliance with minimally required standards.
No independent physician would entrust the management of his or her private practice to the medical staff. It isn’t designed to run a business. Yet in the New World of Healthcare, running a business that assumes the risk for the management of a population’s health is exactly where we are going. A new approach is needed.
The Third Table: Physician Leadership in a Joint-Ventured Business
The new work at the Third Table is managing the Business Performance of physicians -- keeping referrals in-network, assuring high patient satisfaction, and following agreed-upon clinical protocols based upon best evidence-based practices. This is Population Health Management, and it will require a litany of new business competencies that combine both the institutional resources of the health system and the collaborative leadership capacity of physicians:
- Automated Care Management: HER, linked from inpatient to ambulatory, with best-evidence based protocols
- Reduction of Inpatient Readmissions
- Managing cost and utilization of resources across the continuum of care
- Improvement of Patient Compliance
- Managing Clinical Quality Metrics by provider
- Increasing Patient Engagement
- Stratification of patients and targeted interventions to the right people
The Irreducible Ingredient for Success: Leadership
Organizational structures to achieve legally compliant clinical integration are easier to create than is the leadership capacity required to implement and lead those new enterprises. Without effective leadership - - particularly physician leadership - - the best strategies will flounder and fail.
Leaders rarely fail because they don’t know what to do. They fail because of how they do it. “Behavioral competencies” (emotional intelligence and relationship skills) more than “technical competencies” (knowledge of finance, operations, etc.) distinguish the most effective leaders. Recent research reveals that the behavioral competencies needed by physicians to be effective leaders are not the same as for non-physician leaders. Collaboration, political acumen, motivating others and adaptability are the relationship skills that are critical to the success of physician leaders, and are qualities that the research shows are less naturally evident among physicians than the general population. But they can be learned. And the way physicians learn best is through an experiential rather than a didactic process.
The winners in The New World will emerge where executive and physician leaders come together as equal partners around The Third Table with the right Table Manners. And effective physician leaders will be a key to their success.
Eric Norwood, FACHE, is President of CenterPoint Insights, a strategic business advisory firm to healthcare leaders based in San Diego. He is a career healthcare executive and a member of the MEDI Leadership team of executive coaches, the nation’s leading leadership development firms dedicated to the healthcare industry.
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