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So Long, ‘Mom and Pop’

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When Tampa Bay Women’s Care was formed in 1998, the physician-owned and operated OB/GYN specialty practice merged 14 groups into one. Full of expectation but skeptical of how the organization would ultimately take shape, the new partners wanted a lot of input in decisions early on. “We started off with committees for almost everything,” says Robert W. Yelverton, M.D., charter president and CEO.

As the growing pains subsided and the Tampa, Fla.-based practice matured, the 66-physician group created a more defined leadership structure. Yelverton, a 33-year OB/GYN veteran, hung up his white coat 2 1/2 years ago to become the group’s full-time CEO and medical director. He now leads the administrative staff out of a central business office and answers directly to the 16-member board.

The group is divided into 14 divisions based on the original groups’ locations, and each division selects one board member for every three full-time physicians. This structure, Yelverton says, allows each of the offices, regardless of size, to have input. As trust in the leadership has grown, the burdensome committees created at the practice’s inception have been mostly disbanded in favor of the more streamlined decision-making process.

Perfecting a leadership structure doesn’t happen overnight—bringing a diverse group of doctors and multiple agendas to some level of compromise can be a challenge. As the medical business landscape gets more complicated and greater numbers of partners consolidate, practices are eager to add sophistication to an often lax decision-making process, says Richard D. Hansen, vice president and managing principal with Englewood, Colo.-based MGMA Health Care Consulting Group. Generational differences can also spark an organization to change. “Sometimes when younger physicians come in, they want the practice to be run like a business, not like a mom and pop store anymore,” Hansen says.

The road to stable, centralized practice operations has some twists and turns. Practice leaders should keep these five factors in mind when starting out:

1. Don’t wait for the pain

The decision to adopt a stricter governance model often follows a growth spurt. Mike Fleischman, vice president and principal with Atlanta-based Gates, Moore & Co., says when practices reach a certain level, usually around five or six physicians, things often become unmanageable because communication lines grow thin. “Many times the need to develop a formal structure evolves because all of a sudden the doctors aren’t taking home as much money as they did last year,” he says. Time could be an issue, as well, if the long-timer who has been acting as chief is heading toward retirement without an heir-apparent.

A group that lets circumstances prompt hasty action runs the risk of making mistakes. Take a look at your practice now to see where your plan is lacking. You may find that you have a physician or two among you who would be willing to tackle the administrative responsibility.

2. Pick a Leader

Relinquishing control isn’t easy for many physicians. “There’s kind of a classic physician leadership model, where the physician leader can be the first among equals and not one millimeter above them. But this just doesn’t work,” says Ed Zech, M.D., medical director of 38-physician PeaceHealth Medical Group at St. Joseph Hospital in Bellingham, Wash. Once your leaders are selected, Zech says, there should be general agreement that they set the agenda and that the doctors have afollowing role.

To put physicians’ minds at ease—and to have an effective board—lay some ground rules, says MGMA’s Hansen. An executive committee or board should have a written job description that explains expectations and defines the scope of everyone’s roles. In addition, decide which decisions require input from all of the partners. Fleischman says considering these three factors can help determine who should be involved in a decision:
  • The impact on the practice
  • The expense (depending on group size, this may range from $5,000 to more than $25,000)
  • The level of risk or liability the group could face

3. Build trust through communication

Certain character traits can help a leader earn a group’s confidence. Having the respect of fellow physicians is critical, but Fleischman says leaders also should be peacemakers who can rein in “rogues” and encourage participation. When Yelverton moved into an administrative role at Tampa Bay Women’s Care, he earned acceptance quickly by being the “physician on the spot” whom physicians trusted to protect their interests. “The physicians feel like there’s someone who knows what it’s like to be in the trenches,” he says.

Communication also plays a role in building trust. Leaders should keep stakeholders informed of important agenda items. “Once you decide you’re going to have a smaller group make some key decisions, you have to communicate what you’re going to talk about, then tell them afterwards what you did,” says Hansen. Yelverton dispatches board meeting minutes to all full-time physicians and practice administrators the next day.

4. Acknowledge the commitment and give feedback

One of the first hurdles for many new leaders is compensation. Hansen says doctors often don’t realize the time it takes to fulfill the administrative responsibility. Experts like Hansen and Fleischman agree that some degree of payment is usually in order, based on the size of the practice and the degree of responsibility assigned.

Giving leaders time for leadership training is important, too. “If a physician is going to evolve into that role, partners need to understand that they need probably three to four weeks off per year just to get continuing education in management,” says Fleischman.

Leading a practice can be difficult without performance feedback. Regular evaluations narrow leaders’ focus and help them steer the group’s long-term strategy. Yelverton says getting feedback can be difficult, but it’s necessary. “They feel they put me here to do the strategic planning,” he says, “but you can have no buy-in without physician input. I need to know what they want me to work on.”

5. Get someone on deck

One area many organizations take for granted is succession planning. Some groups avoid this by rotating physicians as president. “This is a horrible idea,” says Hansen. “Some people are cut out for it and some aren’t.” He recommends a minimum three-year term, after which the person can be re-elected or bow out.

The leader needs to be a mentor, says Fleischman. “I encourage leaders to never do anything alone,” he says. “When you’re mentoring someone to be in charge of finances and you’re meeting with the banker, make sure they’re with you. If you’re teaching someone else how to negotiate with the hospital, make sure they’re with you so the hospital knows there’s a fallback to deal with.”

Kara Olsen is a staff writer with HealthLeaders magazine. She may be reached at kolsen@healthleadersmedia.com.