Physicians have ultimate control over costs and revenue. That's one reason why physician integration, often a goal for intrepid health systems, should start with their participation in the strategic planning process.
This article first appeared in the December 2017 issue of HealthLeaders magazine.
Physician practice acquisition has become a key tactic to help healthcare organizations retain control over market share and extend their control over the care continuum.
But investment in physicians as employees doesn't mean these organizations have necessarily integrated doctors' input into the long-term strategy for growth.
That takes a little more thought and planning. Hospitals and health systems that have not integrated physicians into management through hierarchy or through governance will pay for that inattention over time.
Physicians won't beg to participate; they have to be recruited, encouraged, and even promoted, but smart CEOs make every effort to make their participation critical to the development and execution of the traditional three- to five-year strategic planning process.
Caregivers drive the plan
Atlantic Health System, a six-hospital health system based in Morristown, New Jersey, tries to focus its strategic planning not on the number of hospitals it has or the number of beds, says Brian Gragnolati, its president and CEO.
Instead, he wants strategic planning to focus on the number of the 4.9 million people in its service area with whom AHS interacts—around 750,000.
Planning begins with how the health system, which is broken up into five regions, interacts with those patients through its integrated delivery system, which includes two ACOs, with a third launching this year. About 2,700 physicians are part of those ACOs.
"Once we understand how we're servicing those areas, we develop overall strategies for each of those market areas," he says.
AHS ties those plans to its budget over a five-year period, and adherence to it is reviewed and adjusted every six months. But physicians and other direct caregivers handle the specifics of how to achieve growth and quality goals.
"The most important thing we need to do in leadership is provide guidance and direction, but our direct frontline caregivers and staff populate the approaches or strategies in the different market areas because they best understand the market conditions," Gragnolati says.
The voices of physicians and other caregivers inform and drive those plans through a bottom-up focus that's critically important because the organization will succeed only if it's able to achieve indispensability among those who pay, says Gragnolati, "which includes government and commercial payers but also consumers, because they're no longer insulated from costs of care."
Kevin Vermeer, president and chief executive officer of UnityPoint Health, a four-state, 17-hospital system headquartered in Des Moines, Iowa, also uses a bottom-up planning philosophy as well, not only in strategic planning, but more specifically to help achieve its transition from a holding company to an operating company.
UnityPoint operates in nine geographically diverse regions, and during the past two to three years, has been soliciting frequent input from physicians about regional nuances and incorporating those into a system strategic plan that Vermeer describes as a rolling three-year plan with one-year operating plans underneath, aimed at removing the variation that regional autonomy has incubated.
"Things are changing so rapidly, it seems like we're constantly reprioritizing, and we need to," he says. "The biggest change for us is that we grew up as autonomous from a regional perspective, with individual business units that drove the plan."
At UnityPoint, caregivers and, prominently, physicians through various leadership groups are charged with taking out much of the legacy variation that exists as a legacy of regional autonomy.
Not alignment but inclusion
AHS works intently on getting physicians involved in strategy through their inclusion in planning and feedback. That starts by getting rid of words such as alignment and engagement when discussing physicians, and using words such as inclusion.
"Historically, [alignment and engagement] have been used in an economic context, to coopt physicians to joining health systems," says Steven Sheris, MD, president of the 900-
physician AHS Medical Group.
Executing the system's strategic plan involves decisions that drive outcomes on a small scale individually, and adopting suggestions from people delivering the care on a daily basis is critical to success, says Sheris.
"We've turned the decision-making upside down, essentially," he says.
Through its planning, AHS asks physicians to partner in a data-driven decision-making process by giving them accountability for outcomes. Physicians determine clinical guidelines by evaluating what data is most important in a variety of committees, sometimes organized by specialty.
"Without fail, there's not a physician that I've come across who doesn't want to be involved in planning. Physicians have historically felt removed from the decisions that affect the practice of medicine. When they lose decision-making, that leads to despair," Sheris says.
At least one hundred physicians in the medical group are directly involved in substantive long-term decision-making, he says.
UnityPoint's Vermeer says the health system got much better at bringing clinician leadership into the planning process and strategic initiatives about five years ago out of necessity, with its physician governance council.
"We've gotten to where we're combining them with administrative leaders across the enterprise in combined strategy sessions," he says
At the regional provider council level, input and recommendations are gathered and submitted to the planning agenda for the system clinical leadership group, which is instrumental in setting clinical priorities, driving best practices, reducing variation, and recommending tools and technology that support those imperatives.
"We're about two years into a structure that basically drives protocols and evidence-based practices and IT pieces," Vermeer says. "Underneath are clinical service groups, organized along service lines like cardiology, ambulatory medicine, and orthopedics. Priorities come through the clinical service group and are adopted throughout the organization."
For AHS, another example of physician participation in strategic planning is the work being done in its ACOs.
"I've been stunned by their level of participation," says Gragnolati.
He attributes this to physician participation in strategic priorities as well as compliance with four consecutive years of savings of close to $39 million shared with the 2,700 physicians in
That shared savings dollars can be a big incentive for active physician participation is no surprise, but Gragnolati attributes the success to starting with a base of independent practice associations to which the physicians in the ACO already belonged.
The ACOs invested in and utilized data analytics to determine how to cut costs of care and improve outcomes.
"We have a great family practice physician who runs analytics, and we're using the data to drive our decisions in these 11 market areas," he says. "They're seeing things they never really had access to or imagined they could see."
The difference in the data, says Sheris, is that it's actionable and has created behavioral change.
"We have access to tons of data, but how is it meaningful?"
For one example, the risk of mortality triples without follow-up after heart attack. The data told physicians that investing in follow-up has a high likelihood of preventing a morbid event, says Sheris.
For his part, Vermeer says the physicians at UnityPoint are also instrumental in forming and executing the broad goal of standardizing best clinical practices across its multiple geographies.
"When physician-driven committees make a recommendation, they put pressure on their peers by providing education on the differences in how they practice medicine," he says.
That removes UnityPoint administrators from dictating practice protocols and puts it into the less contentious territory of providing support to drive those recommendations systemwide, partly through its own ACO.
From a strategic planning standpoint, many activities that engage physicians are foundational, Vermeer says.
For example, with Medicaid, where UnityPoint is moving toward managing a population through a risk-bearing entity, the earlier the administration can engage physicians on eliminating variation, the more they feel aligned, says Vermeer.
"The ACO incentives have also been helpful," he says. "We're better than we used to be, but the biggest challenge is always translating decisions made by the relatively small group that's deeply involved in standardization of practice to the rank-and-file. We're better with the employed physician enterprise, and getting better with the ACO, but a lot of it is that the data analytics tools are getting better able to measure people's performance against the metrics
Not for growth's sake
When Gragnolati and Sheris first started to work together two years ago, before Sheris was president of the medical group, it was going through a period of significant growth.
That growth was occurring largely because of the competitive environment in the state, and without a targeted purpose, says Gragnolati.
When Sheris took on his current role, he agreed to change the conversation with people who wanted be part of the medical group to talk first about quality, and second about that person's ability and willingness to accept the role of value-based payments. Economics was third in the list of priorities.
"By valuing their input ... they can see that it made a difference as it relates to planning, so it's not just checking a box."
"Then we had to create the economic model [through the ACOs]," says Gragnolati. "That shifted the conversation, which then allowed us to create a leadership structure that was more clinically grounded."
Those changes were integral before setting off on a strategic plan, he says, because without those foundational commitments from physicians and the structure in place, AHS would not have been able to scale its plan.
There's no substitute for actually building and actively listening to the physician governance groups, says Vermeer, and you likely only get one chance to get it right.
"The best way is by valuing their input so they can see that it made a difference as it relates to planning, so it's not just checking a box," he says. "You have to communicate throughout the year how we're doing on strategy and that we're showing them action from their input."
With several physicians on the system's board of directors, those influential clinicians can see how the organization is focused on things that are important to both providers and to patients, he says.
"They understand exactly what we're doing as they practice at the highest levels, and that information cascades down throughout the enterprise," he says. "They see we're taking the time to put the structure in place to create a great plan with them, rather than creating a plan and handing it to them to execute on. They want to do great things for patients."
One metaphor that helps keep Sheris focused on the intersection of the patient and physician, and making those thousands of interactions efficient and valuable, is the idea of operating a thermostat.
"Our job, partially, is to dial in the correct pace of change," he says. "Systems that can do that with the greatest agility will be successful. We want a systematic approach to decision-making using data, but consistency doesn't mean inflexibility. It's an art."
For his part, Gragnolati sees his role in the simple terms of communication and demonstrating action.
"As CEO, my job is to get out of the way and make sure the right people are doing the things to bring this stuff forward," he says.
He tries to remind himself that strategic planning isn't a one-time exercise that takes place every several years.
"Every day we're tested on whether what we say and what we do are balanced."
Philip Betbeze is the senior leadership editor at HealthLeaders.