Physician Governance Within Integrated Delivery Systems
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Physician Governance Within Integrated Delivery Systems Physician Governance Within Integrated Delivery Systems Document Transcript

  • Physician Governance Within Integrated Delivery Systems Presented By: Chris Clarke, R.N., System Vice President, PeaceHealth Medical Group Leonard J. Henzke, Senior Manager, ECG Management Consultants, Inc. TELNET 2370 - February 19, 2008 - 1-2 pm EST Agenda I. Introduction II. Overview of Physician Governance III. PeaceHealth Medical Group (PHMG) Case Study IV. Lessons Learned Appendix A – PHOR Organization78590120282(ppt) 1
  • I. Introduction Today we will explore some of the key issues and difficulties inherent in developing physician governance systems within integrated delivery systems. Issue Hospitals are increasingly turning toward physician employment to secure physician alignment and compete in the market. As these physician networks grow, administrators commonly struggle with methods of building physician governance structures that enable employed physicians to provide meaningful input into the business of the physician network. These structures tend to decrease conflicts between physicians and administrators and improve physician satisfaction and network growth. Today’s Goals Outline the key tenets of physician governance structures for an integrated delivery system (IDS) as it grows its employed physician network. Present lessons learned from a case study of the physician governance system developed by PeaceHealth, an IDS with five hospitals and 400 employed providers in the Pacific Northwest.78590120282(ppt) 2 I. Introduction Common Issues As hospitals grow their employed physician networks, there are many issues to consider with regard to formalizing employed physician governance. Issue Description Emulation of Private In private practice, physicians are the Board of Directors. In a health system, careful Practice consideration must be given to how physicians will be provided with the opportunity to be self-governed and how the physician governance entity will interact with governance of the overall health system. Primary Care/Subspecialty As more hospitals recruit highly paid subspecialists into their networks, hospitals Integration frequently experience difficulty in integrating the subspecialists into their employed governance systems (which often have already successful governing bodies composed primarily of PCPs). Roles Newly formed physician networks often do not afford physicians the opportunity to provide meaningful input. More mature networks typically seek physician input in such key areas as strategic planning and development of hospital service lines Payment for Administrative Physicians are increasingly demanding payment for administrative time; physicians Time who are paid to take on governance roles are also more likely to be engaged in these efforts. Political Issues With An active and successful physician governance network has the potential to alienate Independent Physicians physicians who will always want to remain independent; IDSs need to make extra efforts to seek input from independent physicians regarding the hospital’s overall relationships with physicians.78590120282(ppt) 3
  • II. Overview of Physician Governance Building Blocks for Success Newly formed physician governance entities provide general oversight over a network and may plunge into clinical issues. Over time, governance entities can become deeply involved in more substantial issues such as planning and physician/hospital integration. Mature Governance Entity Planning and Hospital/Physician Integration Finance Operations Care General Physician Hiring/ Coordination/ Oversight Termination Quality Emerging Governance As governing bodies become more involved in physician network oversight, Entity the need to create specialized committees arises.78590120282(ppt) 4 II. Overview of Physician Governance Typical Physician Roles and Responsibilities In general, physician governance roles can cover a range of physician network activities, including the network’s integration with hospital operations. Issue Typical Physician Governance Role General Oversight Serve as a forum for physician concerns. Provide input to physician network administrators about key issues. Care Coordination/Quality Oversee quality reporting and quality initiatives. Coordinate care management across practices and/or between specialties. Physician Hiring/Termination Interview candidates being considered for hiring and approve terminations. Finance Oversee and approve changes to the physician compensation plan. Review and approve physician network capital and operating budgets. Operations Serve as a liaison between physicians and administration. Provide guidance regarding major operational initiatives, including IT. Interview candidates for major administrative positions. Planning Develop policy, management, and strategic planning recommendations for the physician network. Set provider recruiting goals. Hospital/Physician Integration Participate in integrated hospital/physician service line planning. Provide input on policies for hospital/physician management and integration.78590120282(ppt) 5
  • II. Overview of Physician Governance Typical Governance Principles Effective physician governing bodies adhere to a set of principles that might include the following: Physicians will be the core of the physician network and should therefore have leading participation in governance. All specialties should be represented in the governance structure of the network. However, each specialty should represent the whole organization, not just its respective constituency. Although physicians in these structures do not have true fiduciary responsibility, they should be influential in setting physician network policies and overall direction. Separate bodies for the primary care and subspecialty components can be maintained on a short-term basis, with consideration of integrating the governance structures in the long term.78590120282(ppt) 6 II. Overview of Physician Governance Tight vs. Loose Integration A common issue faced by an IDS in growing the ranks of employed subspecialists is whether one governing body will oversee all practices, or each subspecialty or practice will be governed separately? Governance Structure Tighter Integration Looser Integration One governing body oversees all physician Each subspecialty and/or practice (possibly divided along practices. geographical lines) is governed by a separate body. Advantages Advantages Promotes a common physician culture. Entails that physicians are governed by members of Can promote economies of scale when used in their own subspecialty. conjunction with common infrastructure. Offers improved physician autonomy. Disadvantages Disadvantages Reduces physician autonomy. May undermine the group’s common culture. May result in given specialties feeling May reduce economies of scale. misrepresented or underrepresented. Requires more administrative meetings. May make it difficult to address group-wide issues.78590120282(ppt) 7
  • II. Overview of Physician Governance Compensation Issues Compensating physicians for their governance duties will help to ensure physician engagement on governance issues, but it needs to be considered carefully. Position descriptions should be developed for governance participants, including the amount of time that will be necessary to fulfill the associated duties and clear outcomes for what is accomplished. Compensation should meet fair market value (FMV) standards and be based on industry benchmarks, such as MGMA. Compensation should be sufficient to make up for lost clinical time; the interaction with a productivity-based compensation plan will need to be carefully considered. Consideration also needs to be given to the differences between clinical and administrative compensation rates.78590120282(ppt) 8 II. Overview of Physician Governance Compensation Issues (continued) As governance responsibilities vary widely across physicians in any employed network, variable methods for compensating these physicians may also be warranted. Position Types Characteristics Governing Body Leader Temporary position. (Board Chair) Approximately 0.2 to 0.5 FTEs. Hours and responsibilities may fluctuate considerably, potentially impacting the physician’s clinical productivity. Attempts should be made to keep physician “whole” as compared to a full-time clinical position, with bonuses similar to system executives. Medical Director/Chief Approximately 0.2 to 1.0 FTE. Medical Officer (CMO) Consistent hours throughout the year. Responsibilities are well defined and typical of a CMO or medical group director. Program/Department 0.1 to 0.5 FTEs. Director Hours fluctuate considerably from month to month. Positions typically require specialty-specific skills. Payment is based on specialty-specific rates. Committee Participation/ Less than 0.1 FTEs. Ad Hoc Positions Meeting participation represents the majority of responsibilities. Payment provided on a per meeting basis.78590120282(ppt) 9
  • III. PHMG Case Study PHMG is a large not-for-profit health system with five hospitals in Oregon, Washington, and Alaska. The Oregon region is the largest region, anchored by Sacred Heart Medical Center (SHMC) in Eugene.78590120282(ppt) 10 III. PHMG Case Study Summary Statistics PHMG’s Oregon region commenced operations in 1995 with the acquisition of a 47-physician medical group in Eugene and has since grown to over 200 employed providers. PeaceHealth Oregon Statistic Region PHMG System Affiliated Hospitals 1 (SHMC) 5 Employed PHMG Providers ~200 ~400 Professional Revenue $100 Million $200 Million Total Revenue $600 Million $1 Billion Number of Employed Specialties 16 30 Although PHMG has typically had regional management and governance, the PHMG network is approaching 400 providers, and thus is moving toward more integration across regions.78590120282(ppt) 11
  • III. PHMG Case Study Evolution of Governance Over the period of 12 years, PHMG’s governance structure has evolved along with the growth of the network; the system is currently working to integrate across the diverse geographical regions it serves. Mid-1990s 2000–2007 2008+ PHMG expected to more closely emulate an integrated, PHMG formed in three regions; Specialists more frequently hired; independent multispecialty group, Network Growth mostly PCPs initially. employed PCPs still dominated. with roughly equal numbers of PCPs and specialists. Physicians active in governing; Physicians active in both regional Governance Limited physician governance. each region built dyad and system-wide physician administrator/physician leadership governance. model. Limited-impact productivity-based Productivity-based plan; each System-wide compensation plan Compensation plan; each region has its own region had its own plan based on being explored, however plan. centralized principles. Further, plan significant cultural differences will design led by physicians. need to be overcome. Centralized and Integrated Physician Governance78590120282(ppt) 12 III. PHMG Case Study 1990s Governance Model – Oregon Region In the initial operations of PHMG, physicians had little oversight impact and the governance structure lacked sophistication. Further, formalized physician leadership was lacking. PHMG Vice President Medical Director Operations Director 100+ Physicians Managers78590120282(ppt) 13
  • III. PHMG Case Study Current Governance Model – Oregon Region Under the current governance structure, a physician council composed of five physicians oversees a dyad leadership structure. Three committees support the council and provide deep quality, finance, and recruiting expertise. Regional PeaceHealth Board PHMG – Oregon Physician Council Quality Committee Finance Committee Professional Staff Committee Regional Physician Council Vice President Chair (Physician) Chief Operating Officer (COO) CMO (Physician) Executive Director, Planning78590120282(ppt) 14 III. PHMG Case Study Current Governance Model – Oregon Region (continued) Under the current model, the physician council and the three supporting committees provide PHMG with deep physician expertise and enable physician input on the key issues of the physician enterprise. Governing Body Membership/Terms Key Roles Physician Council Five physicians (two PCPs, two PHMG strategic leadership. specialists, and one at large). PHMG operational oversight. 3-year terms. PeaceHealth Oregon region (PHOR) strategic leadership. Physician council chair is voting member of the Regional Governing Board. Physician council chair ad hoc member of Regional Executive Team. Finance Committee Five physicians (at large, including Monitors financial performance of PHMG and one AHP). provide oversight and recommendations to the 2-year terms. physician council regarding: » Financial performance. » Operating and capital budgets. » New business plans. » Provider compensation. » Program reviews.78590120282(ppt) 15
  • III. PHMG Case Study Current Governance Model – Oregon Region (continued) Governing Body Membership/Terms Key Roles Professional Staff Five physicians (at large, including Makes recommendations to the physician Committee one AHP). council regarding: 2-year terms. » Provider resource planning. » Recruitment recommendations. » Recruitment process. » Provider benefits. » Practice models (e.g., part-time, shared practice). » Provider leadership development. Quality Committee Five physicians (at large, including Provides recommendations to the physician One AHP). council regarding: 2-year terms. » Alignment and integration of quality initiatives within PHMG including allocation of resources. » Peer review for PHMG. » Quality compliance. » Collaboration with regional quality initiatives as appropriate.78590120282(ppt) 16 III. PHMG Case Study Current Governance Model – Oregon Region (continued) PHMG’s current governance model also utilizes a medical staff development committee to consider physician resource planning for all Eugene physicians (including those outside of PHMG). PHOR Board of Trustees Medical Staff Development Committee PHMG Physicians SHMC/PHMG Independent Administration Physicians The medical staff development committee provides independent physicians with input regarding medical staff development and other medical staff issues, and it prevents the appearance of favoritism to PHMG physicians.78590120282(ppt) 17
  • III. PHMG Case Study Future Governance Model – System-Wide PeaceHealth’s current physician governance initiative includes a move to develop an integrated physician governance network with a centralized body overseeing activities in all geographical regions. The overarching objectives of the governance initiative are as follows: Focus first on quality/patient experience. Improve the daily work life of providers and staff. Address the unique needs of the medical groups for support (HR, IT, finance, quality). Align system and regional strategies to leverage a higher level of performance. Support leadership development and engagement for physicians and staff. Support a dedicated medical group leadership team of empowered, accountable leaders from each medical group, the system, and support departments. Use a matrix structure model with shared accountability. Ensure that system medical group leadership team develops the strategies (e.g., planned care, care model, access, clinical and operational performance, metrics, best practice). Hold regions accountable for strategy implementation and daily operations. Employ common success measures.78590120282(ppt) 18 IV. Lessons Learned In building a successful physician governance model at PeaceHealth, there are a number of lessons we have learned that are applicable to other health systems. Lesson Description Integration It is important to be careful not to force integration of governance bodies (either across specialties or geographies) before the physicians are ready. Cultural differences may require a lengthy period of integration. Follow-Through Following through on physician input is critical; otherwise, support for the governing body is likely to erode. Physician Training Physicians are not trained in management or governing principles; the complexity of IDSs warrants formalized training. Change Leadership Organizations should follow a change process that identifies the stakeholder community early on. A case for change that is understood and accepted by the stakeholder community must be developed and strong facilitation and/or a change process coach (organizational development) should be provided.78590120282(ppt) 19
  • Appendix A PHOR Organization78590120282(ppt) 20 A-1 PHOR Current Organizational Overview Regional CEO Physician Council SHMC Regional Vice Physician Council Quality Committee Finance Committee President Chair Professional Staff Committee COO CMO Executive Director, Planning Business Development Professional Staff Services Team Development Process Redesign Team Pharmacy (Retail) Patient Advisory Council Lead Lead Lead Lead Managers Manager Managers Physicians Physicians Physicians Physicians Internal Medicine Outpatient Pediatrics Orthopedics General Surgery Pediatrics Outpatient Internal Medicine Family Medicine ENT Neurology/Sleep Family Medicine Hospitalist Gastroenterology Dermatology Hospitalist Urgent Care OB/GYN Infectious Disease Urgent Care Opth./Optometry Endocrinology78590120282(ppt) 21 A-2
  • PHOR Executive Team Participation on Physician Council Committees Physician Council Quality Committee Finance Committee Regional Physician Council Professional Staff Committee Vice President Chair COO CMO Executive Director, Planning Physician Council PHOR Executive Team Quality Committee Vice President, Quality Physician Chair Improvement Finance Committee Regional Physician Chair CFO Professional Staff Vice President, Human Committee Resources78590120282(ppt) 22 A-3 PHMG Oregon Region Chief Operating Officer and Operations Directors Physician Council Quality Committee Finance Committee Regional Physician Council Professional Staff Committee Vice President Chair COO CMO Executive Director, Planning Chief Operating Officer Orthopedics General Surgery ENT Neurology/Sleep Operations Director, Gastroenterology Dermatology Specialist Managers OB/GYN Infectious Disease Opth./Optometry Endocrinology Operations Director, Internal Medicine Hospitalist Medicine Managers Family Medicine Urgent Care Operations Director, Pediatrics Pediatrics Operations Director, Behavioral Health Manager Outpatient (Behavioral Health)78590120282(ppt) 23 A-4
  • PHMG Oregon Region CMO and Department Chiefs Physician Council Quality Committee Finance Committee Regional Physician Council Professional Staff Committee Vice President Chair COO CMO Executive Director, Planning CMO Orthopedics General Surgery ENT Neurology/Sleep Gastroenterology Dermatology Lead Chief of OB/GYN Infectious Disease Physicians Specialties Opth./Optometry Endocrinology Chief of Lead Internal Medicine Hospitalist Medicine Physicians Family Medicine Urgent Care Chief of Lead Pediatrics Pediatrics Physicians Chief of Lead Outpatient (Behavioral Health) Behavior Health Physicians78590120282(ppt) 24 A-5 ECG Management Consultants, Inc. ECG is a national consulting firm focused on offering strategic, management, and financial advice to healthcare providers. We are particularly known as experts in hospital/physician relationships, strategic and business planning, and process improvement. Our more than 70 consultants operate out of offices in Seattle; Boston; Washington, D.C.; San Diego; and St. Louis. We have been in existence for more than 35 years and are pleased to count many of the nation’s leading hospitals, health systems, academic medical centers (AMCs), and group practices among our clients. More information is available at 25