Physician Network Management: Insights from an Interim Executive

Background

Senior leadership of a hospital system was growing increasingly concerned over mounting losses and a general lack of operational efficiency in the employed physician network. It was apparent to them that the management infrastructure and talent had not kept pace with the needs of the rapidly growing network. The hospital requested assistance from HSG with placement of an interim executive for the network, in the position of Vice President of Physician Services, as well as the conduct of search and placement for a permanent executive.

The Process

Choosing the right interim is as important as recruiting the right permanent executive. To inform the interim placement choice, HSG conducted on-site interviews with hospital and network leadership and other key stakeholders, focusing on the current state of network operations, management infrastructure and culture. HSG then recommended an interim executive who possessed the needed skill sets and was felt to be a cultural fit for the organization. Following an on-site visit and meeting with senior leadership to introduce the candidate, the interim was approved, a 90-day prioritized plan was developed and approved and the interim began work the following week. The interim placement process was managed over a three-week time period.

The original contract called for a three-month interim to run parallel with the executive search. However, a few weeks into the interim engagement, senior leadership recognized there was more work to be done before it would be appropriate to recruit a permanent executive. The interim engagement was extended for an additional three months. This allowed time for the interim to fully assess and prioritize issues and define an initial action plan for the incoming permanent executive. The permanent executive was recruited to the position, armed with an understanding of the immediate challenges, and is there today

Insights

I recently sat down with that interim executive for insight on the process and challenges of the placement. I asked the interim executive about the three most pressing issues that were presented by this client. A summary of that discussion is below.

Operational Foundation:  The prior network executive had a saying, “Run it like it was your own practice”.  Problematic for a number of reasons.  One location ran differently from the next.  There was no consistency and, thus, no organizational efficiency.  Some “practices” hadn’t changed operating procedures for years and were unaware of current regulatory requirements.

Focusing on operational basics and developing dashboard reports, provided the staff with much needed information and an understanding of the direction the network needed to take.  “Employees want to know what’s expected of them. Once they have that understanding they have a goal to work toward – which is good for everyone involved.”

Relationships:  The old adage “culture eats strategy for lunch” is true.  It was critical for me, while learning about the network’s operations and organization, to pay attention to its culture. Only when the culture is understood can you begin to navigate the relationships needed to effect change. This network, like so many others that have grown quickly, suffered from a vague organizational chart and a sense of “every man (practice) for himself”. The managers did not know from whom to seek guidance and there was not a unifying focus for the organization.

Initial actions included revising the organizational chart and initiating weekly meetings supported by the dashboard reports.

Compliance:  When operational foundation is lacking, compliance is often an issue.  In this network, there were many things happening correctly, but there were a few regulatory/contract issues that without correction could have been costly to the organization.

A common thread I find when doing interim work is that the hospital tends to assume that the physicians will continue to pay attention to regulations and operations with the same interest as during their days operating independent practices.  Once employed, however, only a few of the one-time business owners continue to stay involved and engaged to ensure compliance. This is another example of how important it is to create some type of vehicle like a physician governance/leadership council for the network to ensure physician engagement.

Hospitals across the country are experiencing similar challenges with their employed networks. If your network is undergoing rapid growth or has found itself in operational chaos with growing losses, it may be time to evaluate if your network management team can get your organization to the next level.