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HL20: Patrick McGuire, CPA—On the Path of Mutual Alignment

 |  By kminich-pourshadi@healthleadersmedia.com  
   January 09, 2013

In our annual HealthLeaders 20, we profile individuals who are changing healthcare for the better. Some are longtime industry fixtures; others would clearly be considered outsiders. Some are revered; others would not win many popularity contests. All of them are playing a crucial role in making the healthcare industry better. This is the story of Patrick McGuire, CPA.

This profile was published in the December, 2012 issue of HealthLeaders magazine.

 "There was this lingering mistrust with the physicians so we came to the conclusion we had to burn down our old way of doing things and start anew."

Patrick McGuire, CPA, the senior vice president and CFO at St. John Providence Health System in Warren, Mich., is not your average finance leader. Like many of his peers, he's played a pivotal role in his system's financial transformation, but it's his innovative approach to physician partnership that sets him and his organization apart.

"I feel like my greatest achievement has been maintaining the financial wellness of the organization in one of the toughest markets in the country," says McGuire. Indeed, two of Michigan's three largest employers declared bankruptcy during the recent recession, which caused an economic cascade that bankrupted numerous other state businesses and spurred massive layoffs. McGuire watched as his community's economic crisis led to a growth in the system's uninsured population, testing the organization's ability to creatively reduce costs.

"We had to do what we could to keep our costs in line, but we also had to keep our focus on our mission. We didn't stop caring for the uninsured as they came into our ER. We needed to try to be a vibrant beacon for our community during a very challenging time," he says.

Since joining St. John Providence Health System in 1986, McGuire has helped his system through numerous ups and downs. He's worked to grow the system from a single hospital to seven, helped diversify the enterprise across five counties in southeast Michigan, and saw the organization become the largest single component of Ascension Health, which is the nation's largest Catholic and nonprofit health system, and the third-largest system (based on revenues) in the United States.

McGuire has provided strong financial leadership for the $2 billion health system and stood as a unifying voice for Ascension Health Michigan Ministries when it negotiated a five-year agreement with Blue Cross of Michigan. Unquestionably McGuire is a seasoned healthcare finance veteran, but for all his experience McGuire believes no one can afford to stop chasing innovation.

In 2010, McGuire found himself in unfamiliar territory as the system planned to move into delivering coordinated care to patient populations, and to do that it would need to forge stronger physician relationships. Nationally, some organizations had begun establishing comanagement agreements to meet those ends, but McGuire felt that that approach only partially exemplified the unified approach of St. John Providence.

"We had long standing relationships with our physicians going back to an early 1990s PHO … but we got to 2010 and looked at our alignment with physicians and we realized our physicians didn't view the partnership as much of a partnership, at least not as much as we did," he says. "From an administrative standpoint we believed we had trust and engagement and that we were looking out for the best interest of our physicians, but it became apparent that some physicians didn't see it that way."

Though disheartened by the realization that the organization and it physicians weren't aligned, McGuire and the leadership team became invigorated by the idea of creating something new—a truly equal partnership between the system and the physicians.

"The future of healthcare will require us to significantly partner with the physicians to be successful," says McGuire. "We wanted to move forward on path of mutual alignment where it wasn't us versus them. But there was this lingering mistrust with the physicians so we came to the conclusion we had to burn down our old way of doing things and start anew."

However before an equal partnership could be solidified, the six separate physician groups had to unify and have one voice at the table. The process took nearly a year but in January of 2011, the six St. John Providence-affiliated physicians' organizations became one—The Physician Alliance.

The newly created physicians' organization, consisting of more than 2,300 Michigan doctors, announced a progressive mission: "The organization will assure a more synergistic partnership with St. John Providence Health System and its hospitals, including evolution toward an accountable care organization while maximizing pay-for-performance income for our physicians. The key focus will remain on educating providers around clinical excellence and newly evolving market trends as well as development of strategic contracting opportunities, including risk contracting when appropriate."

In May 2011, The Physician Alliance created an equal partnership with St. John Providence Health System to become SJP Partners in Care. The partnership also required a significant investment to The Physician Alliance by St. John Providence for IT (including an EMR, health information exchange, and patient portal) and other infrastructure changes to encourage better communication and management of care.

SJP PIC created three boards to provide leadership for the organization's activities, including physician services and support, utilization and quality improvement, and finance and contracting.

"We felt the foundational principle of this partnership should be that everything is 50/50 to the extent possible, so we have two co-chairs of the organization—our CEO Dr. Patricia Maryland and the Physician's Alliance vice chairperson Dr. Daniel Megler—and for all boards," explains McGuire. "We've always felt we worked in partnership but to really demonstrate that and to work closely with The Physician Alliance on these committees ensures transparent and candid discussion about all of our issues."

With SJP PIC in place, the organization has begun moving swiftly toward growing its population health offering, expanding its patient-centered medical model dubbed the PCMH Neighborhood and developing an accountable care organization.

"We can't predict with precision what the future will look like but we know we need to change based on what we do as an industry and what the federal government does. So when you're shaping a future without knowing what to expect, you need core principles to believe in and this partnership fits those. We all know, and our payers have told us, this is a very unique arrangement," says McGuire.

"I want the physicians to be the most successful in our market and they want us to be successful. And if I'm not building something to make them successful from a clinical and patient satisfaction standpoint, then I'm not building anything with staying power. If you start with the premise that you're really equal partners you'll have a successful recipe for the future," he concludes.

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Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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