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Exclusive Interview: Lessons From Wayne Sensor's Fall at Alegent Health

Philip Betbeze, for HealthLeaders Media, October 30, 2009

When we talked, Sensor didn't want to go into the details of his departure, but he did say this:

"Our physicians didn't necessarily feel a need for the change (to an employed model) in that reimbursement hasn't largely changed, and that provides great understanding of where they're coming from. That said, they largely supported that vision, but they have to understand what that means when the rubber hits the road. If you're affecting physicians' practice of medicine and in some cases, incomes, that creates tremendous tension and anxiety."

Sensor conceded that he's learned a lot in the past couple of weeks about what went so wrong and how it might have been avoided. My sense is that this type of transformation, as I indicated last week, is inherently pioneering and dangerous to the CEO's career track, so embarking on that level of change is rare. But long-term, if fee-for-service medical payments are undone in favor of so-called "bundled payments," employing physicians seems not only the right thing to do for patient care but necessary financially and operationally. That's a big "if," though.

Perhaps Sensor's biggest misstep was that there was no immediate pragmatic need for the transformation in many physicians' eyes. That doesn't mean it isn't smart, strategically. Still, Sensor wanted me to share with other hospital executives the five main lessons he's learned on this difficult journey, all direct quotes from our conversation:

  1. Be ever mindful of the speed of change: "The filters I would encourage others to apply are two: The organization's ability to assimilate change--uniquely the CEO's responsibility--and leadership's ability to manage the change itself. On how many fronts can you manage the change at one time?"
  2. Create urgency and receptiveness to change, even without a driving platform: "The full impact of healthcare reform will be felt in 2012 and beyond. Reimbursement has historically been the arbiter of change in healthcare, and reimbursement hasn't changed yet. So how do we create an incentive for change when the reality is that (physician) incomes are pretty strong and practices are busy? Many physicians suggested that they don't believe healthcare reform will change anything. That suggests there's not a receptiveness to change."
  3. Create real expectations and understanding of the implications of the change: "There's no doubt that to this day there's widespread support for the vision and strategy of Alegent Health. Yet to be pragmatic, when you start to consolidate clinical services such as cardiovascular and it impacts cardiology practices, we shouldn't be surprised if that creates tremendous tension and anxiety for physician partners. It's great to agree on philosophies, but it's important to really make sure people understand what it really means when the rubber hits the road."
  4. Implications of a growing employed physician practice: "This must be aimed specifically at the independent affiliated physicians in your market. Part of what makes the Alegent story fascinating is that the standard-bearers in the models many want to emulate are almost exclusively closed medical staffs. Alegent has 1,200 physicians of which only 200 are employed and yet experienced tremendous growth in the employed sector in the past five years. The environment is driving physicians to seek employment, and that creates tremendous pressure on the existing affiliated physicians. But what does that mean to the ones who aren't employed? You have to demonstrate that they still have an important role as well."
  5. Is the structure of the organization conducive to transformational change? "This can be applied to the whole organization or parts or the organization. Alegent's five metro hospitals have five independent medical staffs, each with their own structures, each organized around a hospital, while the organization is moving to create systems of care across the enterprise. Well, that's conflictual. So you must really take a hard look and make sure the structures are conducive to the change you want to achieve."

I'll finish with one more quote from Sensor, as I asked him what he would do differently if he could rewind the clock on his tenure: "This experience illustrates how difficult transformational change is in healthcare. This was a good petri dish for change and a lot of it occurred. Generally, I have no regrets. I had an opportunity to lead a progressive organization and to do some wonderful things that affect patients. I hope they carry that momentum forward and distinguish themselves. The five lessons I just shared with you are retrospective, and that's easy. In real time, those are some things I would've done more rigorously, more intentionally, and that is what I would focus on if I had a redo."

At that point, I asked Sensor if he was familiar with a little book by Joseph Heller called Catch-22, which is the genesis for that term describing a no-win situation. He laughed, but didn't take the bait.

Stay tuned to HealthLeaders Media Online and our print magazine. I'm saving a little of what I learned in my interview with Sensor for later.


Philip Betbeze is senior leadership editor with HealthLeaders Media.
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