The New Breed of Physician Practice Administrator
Bruce Bethancourt, MD Internal Medicine
Chief Medical Officer
Banner Medical Group
Interim Practice Administrator, B. E. Smith
Newport Health Care
Corporation Medical Associates
Joseph Golbus, MD
HealthSystem Medical Group
Senior Leadership Editor
Chief Operating Officer
B. E. Smith, Inc.
HealthLeaders: New people with new skills are coming to physician practice management. What's different about running the administrative side now compared to the past?
Tim Morgan: You have two types of managers in this role. One is the traditional practice manager who grew up in practice management. In many cases, those jobs were more transactional, making sure that the billing was getting out okay, accounts receivable was managed—those types of day-to-day things. The other type is the hospital-trained person who, in some instances, may be less qualified to manage a physician practice. So we're undergoing a transformation to the high-level strategic practice administrator who is comfortable with things like mergers and acquisitions, contract negotiations, productivity, and compensation formulas.
Bruce Bethancourt, MD: Previously you'd see somebody from the hospital who was given the opportunity to manage an outpatient office and, to them, the practice was small potatoes. They might not pay attention to credentialing, to compliance, to contracting with health plans. The best administrators not only have to think of operational issues but also the strategic vision. Patrick Peer: As we see more and more multispecialty groups developing, today's administrator has to be able to converse with a pediatrician and understand their needs, then speak with a neurosurgeon and understand what their needs are, as well as educating hospital administrators and senior staff as to what acquiring a medical group is really about, and for them to understand the nuances that come along with the acquisition.
Joseph Golbus, MD: Going back 20 years, it didn't matter that much who ran a practice. But the need for physician leaders and physician managers has changed dramatically, reflecting the changes in the healthcare environment. Innovation used to be very slow; now, it's incredibly rapid. Healthcare used to be paper-based, but now it is electronic. It used to be provider-centered and price-driven; it's now patient-centered and value-driven. One of our physician leaders said it well a few years ago, when we were talking about these changes. He said, "All of a sudden, I woke up one day and realized it wasn't about me."
HealthLeaders: How have the selection criteria for practice managers changed, especially for those who are physicians?
Golbus: Traditionally, physician leaders assuming administrative roles were chosen exclusively on their clinical skills, not necessarily the skill set needed to do the job. Certainly, a physician leader needs to have the clinical respect of his or her colleagues. But that is no longer sufficient.
HealthLeaders: What are hospitals often missing when they bring on an administrator to run a practice?
Golbus: Whether it's primary care or a specialty, you have to have a really good understanding of both the clinical capabilities and quality performance of a practice, as well as the business model. The first questions can't be, "What is it going to cost us and how quickly do we get a return on our investment?" Primary care practices aren't necessarily going to make a lot of money off their own professional revenues, but are invaluable to a system for patient access, loyalty, and delivering quality care. Most important, as with any relationship, good faith, trust, and shared goals have to be a key part of an acquisition.
Bethancourt: We see issues where, for example, the hospital brings in a group of primary care or multispecialty physicians, and they take all the ancillaries away. The hospital does well, they now have all those ancillaries, and they're saying, "You were profitable before, why aren't you profitable now?" Well, you took everything away from us. Another problem is that a lot of hospitals in the past few years, at least in Arizona, have hired physicians, created small groups—whether it be general surgery or orthopedic surgery—as a service model to help cover the emergency department because they couldn't get coverage elsewhere. That sounds like a great solution and it works for a while, but how many orthopedic surgeons only want to take care of hip fractures? You cannot just buy a one-fix solution for a particular problem with healthcare delivery, as it is not sustainable.
HealthLeaders: How important is transparency financially and clinically in creating a healthy practice? What's the administrator's role in fostering transparency?
Bethancourt: Trust is a big issue. It takes impeccable communication skills in an administrator. You cannot sugarcoat anything, especially if it is challenging information. One thing about physicians is that they may not like what you say, but they will respect you for straightforward, honest communication. That is how you develop a team approach.
Golbus: A couple of examples of where transparency around information is especially important are revenue cycle and physician compensation. Some seem to have an irrational fear about sharing data—as if there's something evil or dangerous about it. At NorthShore Medical Group in our early days, we had problems with our revenue cycle. It was a significant source of turnover and, in some ways, paralyzed us as an organization. It became the excuse to not do anything. If we needed to start a new clinical program or open a new office, the physicians might say, "I'm not doing that because you're not collecting from my efforts." Sharing the data around the entire revenue cycle, the problems, and, in particular, what role the physicians played in the cycle, was critical to improving the process and getting widespread buy-in. Another challenge we had related to compensation models. Our organization, like many, was formed with people with disparate backgrounds and circumstances. Many of these physicians perceived or feared that others in the group came in under a better deal. So getting transparency and consistency around compensation was important. That doesn't mean everyone gets paid the same amount of money, but it does mean they will be paid by the same methodology for their specialty. For example, our primary care physicians can be 100% comfortable that if the guy next to them is making more or less, it's because of how he's performed under the model, not the result of some special deal.
Peer: One of the challenges for hospital-based practices is a willingness to get physicians involved in recruiting the people with whom the new physician is going to be a partner and a colleague. When physicians are involved in recruiting and selecting their partners, you tend to hire the person who is going to benefit the hospital, group, and the community. Physicians have internal sources most administrators don't possess. The more you get the physicians involved, the better the outcome is, and the more credibility administration has.
HealthLeaders: No matter the size of the practice, one common challenge is in strategic planning and how that ties into the collective performance of the group. How has that changed?
Golbus: I was trained as a physician to collect my own data, come up with my own conclusions, and take care of the person in front of me. Don't talk to me about being accountable for organizational performance. Don't talk to me about partnering with others. So it's not something that comes naturally to many who trained in the old days. Now physicians in groups need to be engaged in the planning process and need to understand the compelling environmental mandate to integrate. We're moving from the age of autonomy to the age of integration.
Morgan: It's important to note that in the leaders in this room, we're talking to the front edge of the bell-shaped curve here in terms of sophistication. A large group of practices and hospitals are not strategically planning. However, we should be cautious about creating too much mystery about strategic planning. It's methodically looking at the market, figuring out what the challenges are, and then figuring out how to attack those challenges. Many times, we'll work with practices that either don't have the time or the skill set to do strategic planning in a way that will get them ready for healthcare reform, but they are realizing it is critical to start planning for capital, care, the medical home, and IT requirements. There's an evolving role for a sophisticated practice management leader who is going to help drive that strategic plan.
Peer: This industry is changing fast. We used to have the luxury of a three- or five-year strategic plan. Now, some plans become obsolete within 90 days. The EMR is a good example. The federal government provided each physician with $44,000 to purchase and establish an electronic medical record for their office by 2014, and with the varied programs available—many not being able to converse with another system—they are left on their own when developing the planning and implementation process.
Peer: We're dealing with sophisticated patient communities. They are educated consumers and ask more questions. They're looking at things not only from the patient's perspective, but from the consumer's perspective because they are paying more out-of-pocket expenses and want to be assured their healthcare dollars are not being wasted. We have to be able to assure them that we're not going to waste their time, we're not going to waste their money, and we're certainly not jeopardizing quality because of cost.
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