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Who Really Rules?

Philip Betbeze, for HealthLeaders Magazine, December 8, 2009
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"Our physicians didn't necessarily feel a need for the change in that reimbursement hasn't largely changed, and that provides great understanding of where they're coming from," he admits. "That said, they largely supported the 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."

A dying model?
All over the country, SSB's Sokolov has been involved in restructuring medical groups "so they function like Mayo or Geisinger," he says. "With a recent change in ancillary reimbursement, docs and hospitals are coming together to offensively take the lead in integrating care, and defensively, to fight a decrease in reimbursement."

Already reimbursement is higher for a hospital-sponsored medical group doing the same services as a nonhospital group. As a result, a larger proportion of the medical staff, consisting of independent physicians, feels that sponsored groups are disproportionately advantaged, Sokolov says, even though the CEO may have no control over reimbursement realities and might be trying his best to mollify all factions in a pluralistic medical staff.

"What happened with Wayne is specific to Alegent—it's one of many examples of the natural tensions that occur between the board and the executives and the medical staff," he says.

Though he has no specific knowledge of the difficulties that led to Sensor's downfall, one of his contemporaries says that making clear the organization is pursuing a "pure" form of integration is probably the only way to go in making such monumental change, and suffering through the growing pains is a necessary part of coming through it.

"The call to action for healthcare leaders in these challenging times is that institutions and physicians need to be pulling together. Our future ability to provide better and more cost effective patient care depends on it," says Kelby Krabbenhoft, president and CEO of Sanford Health System in Sioux Falls, SD.

By a pure form of integration, he means that transitioning to a largely all-employed medical staff was the vision he and his board pursued from Day 1, with no opportunities for physicians to do joint ventures or "carve-out" deals with independent physicians. Board support, naturally, is critical.

"Undoubtedly, the board has to also be committed to the integration model and not having the organization engage in any joint venture or carve-out arrangements," says Krabbenhoft. "They have to believe in this principle and be prepared to say publicly that they're not going to waver in the face of pressure." And that means being prepared to see a practice walk away.

"At the beginning, here at Sanford, a lot of high-level cardiologists didn't want to see us create what we did create. But a critical mass of primary care docs and some specialists did like it who could overcome that," Krabbenhoft says, adding that Sanford physicians largely run the system themselves and stay true to the vision of pure integration, believing that it "works" regardless of large-scale reimbursement changes that may or may not result from the healthcare reform.

"If a doc wants to leave and start his own thing, he's welcome to do that and we'll welcome him back if it doesn't work out, but we're not going to change our fundamentals," Krabbenhoft says.

Some 90% of Sanford's revenue now comes from Sanford Clinic staff physicians. "That doesn't exempt you from taking care of your Ps & Qs," Krabbenhoft says, "but it signals you've crossed one major chasm and the idea of threats and uprisings do alleviate."

Going forward
Being a transformational or pioneering leader should be a conscious choice, Sensor insists, and he knew from the beginning that forcing integration was a risky career bet.

"There's nothing less honorable about being a late adopter, but we need pioneers," he says. "It's a tough journey even if you have the right environment and you have a transformational leader. Obviously I'm disappointed with those votes and disappointed I can't lead the next chapter, but I'm incredibly proud of what it's become as an organization. And I'm looking at this as a gift that I have a larger canvas to paint as an agent of change."

Strohmyer wishes well for Sensor and Mark Kestner, MD, the system's former CMO, who resigned in the wake of Sensor's departure. "Where they were headed was the right way, but I guess they were a just a touch ahead of their time."


Philip Betbeze is senior leadership editor with HealthLeaders Media. He can be reached at pbetbeze@healthleadersmedia.com.

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